Democratic President Joe Biden may want to erase student loans but members of his party are at odds with how the process should be done and what amount should be forgiven.
As the Washington Examiner reports, Biden is calling for Congress to take action to erase at least some of the $1.68 trillion national student loan balance.
The Biden administration specifically called for a bill that would forgive $10,000 of federal student loans.
But, Congress has a much different idea.
Pushing back, Senate Majority Leader Chuck Schumer is calling on Biden to sign an executive order requiring the Department of Education to forgive a much larger sum — $50,000.
“There’s very little that the president could do with a flick of a pen that would boost our economy more than canceling $50,000 of student loans,” Schumer said on Friday.
Here’s more, from the Washington Examiner:
Biden has not expressed support for canceling $50,000 in debt for anyone with federal student loans, but he proposed canceling $10,000 in debt for those with federal loans as part of his coronavirus relief package. In the past, Biden has preferred forgiving debt through legislation, but on Thursday, press secretary Jen Psaki said that the White House was “reviewing whether there are any steps he can take through executive action, and he would welcome the opportunity to sign a bill sent to him by Congress.”
In contrast, Republicans are against the idea of student loans as they claim it is fiscally irresponsible. Some economists, too, claim forgiving student loan debt primarily benefits wealthy people.
American Action Forum President Doug Holtz-Eakin told the Washington Examiner that forgiving loan debt could have long term effects of disincentivizing people to pay for higher education: “If we cancel student debt and we set a precedent and the expectation that debt will be canceled, why would anyone pay for their own college anymore?”
“They should just take out debts and expect them to be forgiven, so there’s terrible incentives, and [it] undercuts future lending in a serious way. It rewards the affluent more than it helps the poor,” he added.
“The core objected is to have a well-educated and highly skilled population — canceling debt doesn’t do anything to improve the quality of the education system, the delivery of a quality college education, in particular, so it doesn’t take us toward that,” Holtz-Eakin concluded.
$1,900,000,000,000 for a stimulus package.
$93,000,000,000,000 for the Green New Deal.
$650,000,000,000 to cancel student loans.
$40,000,000,000,000 for "free" healthcare.
Guess who is writing the check? You.
— Lance Gooden (@Lancegooden) February 6, 2021