Biden eyes executive action to provide federal student loan debt relief – FOX13 News Memphis

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WASHINGTON — President Joe Biden plans to take executive action to deliver federal student loan debt relief to borrowers nationwide as he continues to call on Congress to act amid the coronavirus pandemic in Classes.

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In a Twitter post on Thursday, White House press secretary Jen Psaki said members of Biden’s team were considering his options.

“The President continues to support student debt cancellation to provide relief to students and families,” she wrote. “Our team is looking at whether there are any steps he can take through executive action and he would be happy to sign a bill sent to him by Congress.”

The announcement came after Psaki told a press conference that Biden was “calling on Congress to craft the proposal.” Previously, Biden had indicated he was unsure whether as president he would have the power to write off large swaths of student debt.

“I think it’s quite debatable,” he said in December, according to Policy. ” I’m not sure of it. I’m unlikely to do that.

A group of Democrats, including Senate Majority Leader Chuck Schumer of New York and Sen. Elizabeth Warren of Massachusetts, earlier Thursday urged Biden to use executive action to undo $50,000 of federal student loan debt for each borrower. They framed student loan forgiveness as a social justice issue that would particularly affect students of color and help close the nation’s racial wealth gap.

“There’s very little the president could do with the flick of a pen that would stimulate our economy beyond canceling $50,000 in student debt,” Schumer said Thursday at a conference. press with Warren and other progressive lawmakers calling for student debt relief. “It’s one of those things the president can do on his own.”

Republicans have opposed proposals to cancel student loan debt, saying it unfairly shifts the burden from borrowers to taxpayers.

During a Wednesday hearing with Biden’s pick to lead the Department of Education, Sen. Richard Burr, RN.C., urged the president not to pursue student debt cancellation, which he called it “dangerous and reckless”. Instead, he called on Biden to work with senators to pass legislation “that dramatically simplifies student loan repayment options, allows borrowers to pay whatever they can reasonably afford, capped at 10% of their discretionary income and have their loan canceled after 20 years. ”

Economists have also questioned whether a decision to write off student debt would have the desired effect. A analysis published in October by the Brookings Institution found that almost 60% of outstanding student debt was owed by people with household incomes over $74,000, while low-income people accounted for just under 20% of the total. outstanding debt.

In one column published in NovemberJames Looney, a former Treasury Department official and senior fellow at the Brookings Institution, said writing off $50,000 of student loan debt for each borrower would cost about $1 trillion and be one of the “most great transfer programs in the history of the United States”.

“And its greatest effect would be to improve the finances of college-educated workers, who already tend to be winners in an economy marked by ever-increasing inequality,” he wrote.

Calls for debt forgiveness are growing after years of tuition hikes that have contributed to rising national student debt. More than 43 million Americans owe a total of $1.6 trillion in federal student loans, The Wall Street Journal reported.

In an effort to provide relief soon after the pandemic hit last year, former President Donald Trump’s administration suspended federal student loan payments and set interest rates at zero percent. . Upon taking office, Biden extended the moratorium until at least September 30.

The Associated Press contributed to this report.

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