Reducing, or outright eliminating, debt for the 43 million people who've borrowed money via federal student loans has long been a top priority on progressives' wish list. And President Biden is seriously considering "some debt reduction," he announced this week, though advocates shouldn't get their hopes up too high on how far he'll go. "I'm in the process of taking a hard look at whether or not there will be additional debt forgiveness," he told reporters Thursday at the White House, per the Wall Street Journal. Details:
- Lower expectations: In terms of the $50,000-per-borrower number that's been floated by some more wishful Democrats, Biden ruled that out, adding that he'd make a final decision over the next couple of weeks. An executive order on the issue seems most likely, as legislation for a unilateral wiping-out of debt, no matter what the figure, probably wouldn't get enough support in Congress, the Journal notes.
- Pressure from liberals: Democrat and progressive groups and leaders are putting the squeeze on Biden to move on the issue. "Borrowers don't just need their debts paused; they need them erased," Senate Majority Leader Chuck Schumer, who's pushed for that $50,000 reduction, said Wednesday on the Senate floor, per CNN.
- Snark from Republicans: One jab came from Sen. Mitt Romney, who tweeted Wednesday: "Other bribe suggestions: Forgive auto loans? Forgive credit card debt? Forgive mortgages? And put a wealth tax on the super-rich to pay for it all. What could possibly go wrong?"
- Bones of contention: One of the sticking points for critics on such across-the-board forgiveness is they don't think families who can afford pricey private schools should benefit from such a program. Other hesitations are tied to inflation and the murkiness of whether Biden has the authority to wipe out such debt using his executive powers. Sources tell the Journal Biden's advisers want to ensure the debt reduction mainly helps lower- and middle-income families, via such possible options as income thresholds or perhaps limiting loan forgiveness to undergrad degrees only.
- Biden's magic number: During his campaign, he called for an immediate nixing of $10,000 of debt per borrower, plus for getting rid of all tuition-tied federal debt for students who attended public college and universities, and whose annual household income was less than $125,000 per year. The Journal's sources say Biden still seems comfortable with that figure.
- Mixed feelings: Although some proponents feel that a significant slash in student debt would reenergize the Democrat base—especially younger Democrats veering away from Biden in the polls, as well as minorities who would benefit most from it—others who are more wary fear it could fuel resentment among voters who've paid off their own debt, or never accrued it at all.
- Grads are over-optimistic: Meanwhile, CNBC reports on a disconnect among students' perception and reality when it comes to how much they'll have to throw at their loan payments: A new report from the National Association of Colleges and Employers indicates average starting salaries for this year's college grads are expected to be about $50,000. In a separate survey, however, college students expect to make an average of $103,880 at their first job.
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