U.S. Democratic presidential contender Joe Biden has said that as president, he would forgive $10,000 in individuals’ student loans, including more relief for those earning less than $125,000, especially alumni of historically black colleges and public universities.
During a press conference held in Delaware on Monday (Nov. 16), Biden said: “Legislation passed by the Democratic House calls for immediate $10,000 forgiveness of student loans. It’s holding people up. They’re in real trouble. They’re having to make choices between paying their student loan and paying the rent, those kinds of decisions.”
Biden was referring to a congressional action rather than a potential executive action if he wins, one of his campaign representatives told Fox News.
Top Democrats are endorsing the program.
Senate Minority Leader Chuck Schumer (D-N.Y.) said earlier this month that a Biden administration should in its first 100 days erase $50,000 of student debt for each person, pointing to a proposal he put forth with Sen. Elizabeth Warren (D-Mass.) Schumer told MSNBC analyst Anand Giridharadas.
On Nov. 12, Sen. Elizabeth Warren (D-Mass.) wrote on Twitter: “Biden-Harris can cancel billions of dollars in student loan debt, giving tens of millions of Americans an immediate financial boost and helping to close the racial wealth gap. This is the single most effective executive action available for a massive economic stimulus.”
Biden also told reporters on Nov. 16 that student loan forgiveness does figure in his plan for boosting the economy. But he did not mention how much it would cost the federal government nor how he would pay for it. Rob Berger, a senior contributor to Forbes, noted in an article published Sept. 4 that while Biden’s campaign website had mentioned a total cost of $750 billion, that information has since been removed.
Brad Polumbo, a contributor for the Washington Examiner and host of the Breaking Boundary podcast, said that there “is no such thing as debt ‘forgiveness’ or ‘cancellation.’ When proposals call for ‘cancellation,’ what they mean is that taxpayers pick up the tab. The debts don’t just disappear — they get passed on to all of us.”
The Federal Reserve Bank of New York reported that outstanding student loan debt stands at $1.55 trillion nationwide as of the third quarter of 2020.
On March 20, President Donald Trump froze student loan payments and temporarily reduced interest rates to zero percent as part of measures to cope with the COVID-19 pandemic.
In August 2020, President Trump extended this relief act until Dec. 31. He said: “This relief has helped many students and parents retain financial stability. And many other Americans have continued to routinely pay down their student loan balances, to more quickly eliminate their loans in the long run.”