Student debt pushes to the front of Biden’s agenda

The debate over loan forgiveness is raging between parties and within them.

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SOURCEMoyers on Democracy

When the coronavirus pandemic hit the US this spring, lawmakers on both sides of the aisle struggled to pass a relief package. Along with expanded unemployment benefits and stimulus checks, Congress provided much-needed student loan relief, halting debt collection and pausing federal student loan payments. While these measures largely had bi-partisan support, Republican lawmakers, in particular, have since refused to tackle the larger issue of student debt. 

The Crisis  

Over 45 million Americans hold $1.7 trillion in student debt. In March, several Democratic leaders, including Sen. Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-MI), moved to address this mounting crisis by proposing a plan to provide at least $10,000 in student loan relief for each federal borrower during the national emergency.    As Warren said, the plan set out to “…create a real, grassroots stimulus to help see us through this crisis.” 

Most Senate Republicans, even those who supported an expansive relief bill, dismissed the proposal. “Democrats are trying to reduce student loans by $10,000,” Sen. Lindsey Graham (R-SC) said on Fox News, “What the hell has that got to do with the virus?” 

Decades of Disinvestment in Education 

 Though objecting Senators may speak on the issue with authority, by and large, they are not in touch with the struggles of today’s student borrowers. In Congress, the average age of Members of the House is around 57 years; the average age of Senators is over 61 years. This means that the majority of lawmakers went to college in the 1970s and 1980s before costs spiraled out of control.  

 During the Reagan era, the cost of college shifted from states to students. After tax limits passed in the 1980s, state governments were restricted in the amount they could tax and spend. Public colleges suffered as a result. By the late 1980s, tuition for public colleges was rising at a rate that outpaced rising incomes, and Reagan’s deep cuts to higher education funding and student aid only pushed the price up further. Between 1980, and 2014, the annual increase in college tuition grew by around 260%, far more than the 120% increase in other consumer items.  

As tuition climbed, students increasingly relied on federal loans to cover the cost of tuition. Even then, many struggled to break even; the government limits for borrowers pushed students to turn to private lenders – banks, credit unions, and state-affiliated organizations – to make up the difference. Often, these private loans wind up being far more expensive. Unlike the government, these lenders set their own terms and do not guarantee fixed interest rates.

 There is no sign that things are slowing down. Today, Americans spend more per student than any other country other than Luxembourg. As a result, students step into the job market with enormous financial burdens, with the average borrower shouldering $32,731 in student debt

Pressure on Biden Builds 

At the start of his campaign, President-elect Joe Biden did not make student loan relief a significant part of his platform. On his website, he only mentions student debt in passing. Biden promises to “Help teachers and other educators pay off their student loans” without delving into any specifics about how this will be achieved. 

Perhaps bending to pressure from the progressive wing of the party, Biden began to wade into the discussion this March. In a tweet, he endorsed the Democratic proposal for $10,000 relief for federal student borrowers. Months later, at a press conference, he gave his support for a provision of the HEROES Act that calls for the federal government to pay up to $10,000 in private loans for low-income borrowers.  

This September, Sens. Warren and Schumer made another push to resurrect the debate, this time with a bolder vision. Together, they co-authored a resolution calling for the next President to use executive authority to cancel up to $50,000 in federal student loan debt per student. That would mean that debt for three-quarters of borrowers could be erased.  

Biden has yet to endorse this plan, but Democrats continue to urge him to take action. As a companion to the Schumer-Warren resolution, House Reps. Alyanna Pressley (D-MA), Maxine Waters (D-CA), Ilhan Omar (D-MN), and Alma Adams (D-NC) introduced a resolution that echoed the call for forgiveness of $50,000 of federal debt. Young voters that helped secure Biden’s victory are among the most vocal advocates for broad student debt cancellation. zzThe debate has already begun. VOX is tracking the discussion minute by minute. Soon there will be many more.

VOX: The debate over Joe Biden canceling student debt, explained

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