Biden administration resists Democrats’ pleas on student debt relief as deadline nears

WASHINGTON — Congressional Democrats are urging the White House to extend the freeze on student loan repayments, and for the president to cancel up to $50,000 of student debt — but so far the administration is not budging.

The standoff is one of the more noticeable splits between President Joe Biden and members of his party, who are applying intense pressure to provide more borrower relief as the expiration of a pandemic-era freeze nears.

Stephen Graves, the director of undergraduate studies for the Department of Black Studies at the University of Missouri, said in an interview that Black student borrowers are going to be affected the most by the end of the freeze, and he warned it could affect turnout of young adults at the polls in 2022.

“A lot of Black students usually end up with undergraduate degrees, and or majors, or taking jobs that are less likely to allow them to pay back those student loans,” he said.

During a recent press briefing, White House press secretary Jen Psaki told reporters that the Biden administration has not directed the Department of Education to continue the pause on student loan repayments, which ends on Jan. 31.

Psaki said that President Joe Biden supports a $10,000 per borrower cancellation of student debt, if passed by Congress.

“If Congress sends him a bill, he’s happy to sign it,” she said. “They haven’t sent him a bill on that yet.”

Emergency freeze

In the beginning of the pandemic, in March 2020, the Trump administration issued an emergency pause on student loan repayments. Both the Trump and Biden administrations extended it. The pandemic is still ongoing, and the U.S. just surpassed 800,000 deaths due to the coronavirus.

Senate Democrats now are urging Biden to use his executive privilege to cancel up to $50,000 worth of student loan debt.

“There have been questions and asks about what executive authorities could be used; that has been under review,” Psaki said on Tuesday. “I don’t have anything to report on that at this point in time.”

Senate Majority Leader Chuck Schumer, a New York Democrat, said on the Senate floor that congressional approval is not necessary, and that Democrats lack the votes on their own to pass  legislation that would cancel student debt.

In an evenly divided Senate, Democrats would need all their party members to fall in line, along with 10 Republicans, due to current Senate filibuster rules.

“This is about taking one commonsense, easy step to save peoples’ costs; it’s about racial equity; and it’s about giving people more opportunities to build wealth and achieve the American dream and the administration can do it on its own,” Schumer said.

The Federal Reserve estimates that the total U.S. student loan debt is more than $1.75 trillion. The Department of Education owns about 92% of that student loan debt, which is why Democrats argue Biden has the authority to wipe out student debt through an executive order.

Sen. Raphael Warnock of Georgia, along with 13 Senate Democrats, sent a letter to Biden, arguing that the country is still in a state of national emergency due to the pandemic and that the administration should extend the freeze.

“The U.S. Department of Education (“Department”) notes the waiver of student loan interest is saving borrowers an additional $5 billion each month,” they wrote in the letter. “This is money that is now available for housing, food, and other daily necessities to help borrowers support themselves, their families, and their communities during this pandemic.”

Other senators who signed on include Ron Wyden of Oregon, Cory Booker of New Jersey, Sherrod Brown of Ohio, Tina Smith of Minnesota, Chris Van Hollen of Maryland and Tammy Baldwin of Wisconsin, among others.

Some loan forgiveness 

The Biden administration has forgiven up to $11.5 billion in loans for nearly 600,000 borrowers.

However, that forgiveness only applies to borrowers in specific circumstances — those who have permanent disabilities, who attended schools that are no longer in operation or public service workers.

During a town hall in Wisconsin in February, Biden was clear that he did not support the cancellation of up to $50,000 per student borrower and said that he only supported a $10,000 cancellation by Congress.

In a letter to Biden, the Student Borrower Protection Center — a student loan advocacy group — along with 200 organizations pushed for immediate student debt relief.

“It is critical that your administration continue to deliver on your promises made to student loan borrowers and their families before ending the pause in payments and collections,” according to the letter.

Borrowers need immediate relief from the crushing burdens of massive student loan debt as the pandemic exacerbates financial strain for all Americans and throws existing racial disparities in wealth and educational attainment into especially stark relief.”

The organizations pointed out that the “burden of student debt and the costs of our broken student loan system fall disproportionately on Black and Brown borrowers.”

The Brookings Institution, a left-leaning think tank, reported in 2016 that, on average, Black students who graduated owed $7,400 more than white, Asian and Latino students who graduated at the same time.

Repayment struggles

Graves said that Black borrowers take on larger amounts of student debt, likely more than other groups, and struggle with repayment.

Even with the pause on student loan repayments for the last two years, Black borrowers are still unlikely to benefit as much as white borrowers, he said.

“Not having to pay those student loans in the last couple of years has allowed them some kind of flexibility, of course, but unfortunately that’s happened during the time of COVID for which there’s been a higher amount of layoffs and job losses and Black people are most likely to be in laborious jobs that don’t allow them to work from home,” he said.

He added that young voters are not going to be motivated to vote for Democrats if campaign promises such as reforming student loan debt are not kept.

“You went out there on a platform of forgiving student loan debt,” Graves said of Biden. “You came out on the platform of student loan forgiveness and then you of course then reneged and then lied about it and did not do so. Young people are going to remember these things.”

In October 2020, during a town hall in Miami, Biden said that “I’m going to eliminate your student debt if you come from a family (making less) than $125,000 and went to a public university,” according to Black Enterprise.

Biden later added that, “I’m going to make sure everyone gets $10,000 knocked off of their student debt.” Biden’s campaign platform called for making public college tuition-free for those earning less than $125,000 and other initiatives.

Graves added that many of the policies that Democrats are pushing do not help young voters, but benefit middle class white voters, such as the expanded child tax credit and paternity leave.

“Things like the child tax credit are doing nothing for young Democrats,” he said, “Young people aren’t having kids. We can’t afford to have kids.”

Biden’s big social spending bill caught in snags in the Senate

Negotiations have foundered over objections by Sen. Joe Manchin, who has said the price tag for “Build Back Better” should account for a 10-year expansion of the child tax credit, which would help lift millions of children and families out of poverty. (Samuel Corum/Getty Images)

WASHINGTON — President Joe Biden’s giant social and climate spending bill on Thursday night appeared stalled in the U.S. Senate for some time to come, a deep frustration for congressional Democrats who aimed to pass the ambitious package by the Christmas recess.

At risk also is a temporary expansion of the child tax credit, the last payment of which was made Wednesday. The expansion was included in Biden’s bill, known as Build Back Better, and Democrats in the evenly divided Senate say they can’t pass it separately because Republicans won’t support it.

In addition, the Wall Street Journal reported that a key immigration provision added by the House to the bill has been rejected by the Senate parliamentarian.

“We strongly disagree with the Senate parliamentarian’s interpretation of our immigration proposal, and we will pursue every means to achieve a path to citizenship in the Build Back Better Act,” Democratic Sens. Chuck
Schumer of New York, Dick Durbin of Illinois, Bob Menendez of New Jersey, Catherine Cortez Masto of Nevada, Ben Ray Luján of New Mexico and Alex Padilla of California said in a joint statement in reaction.

Biden in a statement on Thursday night said that he spoke earlier in the day with congressional leaders about his negotiations with Sen. Joe Manchin III, the moderate West Virginia Democrat whose objections to the funding of the expanded child tax credit have held up the Build Back Better measure.

“My team and I are having ongoing discussions with Senator Manchin; that work will continue next week,” Biden said. “It takes time to finalize these agreements, prepare the legislative changes, and finish all the parliamentary and procedural steps needed to enable a Senate vote. We will advance this work together over the days and weeks ahead; Leader Schumer and I are determined to see the bill successfully on the floor as early as possible.”

During Thursday’s White House press briefing, Deputy Press Secretary Karine Jean-Pierre said that the administration would not go into details on a timeline for when the bill would be passed.

“The president is determined to get this done as soon as possible,” she said.

Negotiations have foundered over objections by Manchin, who has said the price tag for “Build Back Better” should account for a 10-year expansion of the child tax credit, which would help lift millions of children and families out of poverty.

The bill now includes just a one-year expansion, through 2022, and adding another nine years of the revamped tax credit would push the overall cost far beyond what Manchin has said he would accept.

Manchin told CNN earlier this week that Build Back Better should be “within the limits of what we can afford.”

Manchin also has objected to the inclusion of a universal paid parental and family leave provision.

The Congressional Budget Office has estimated the bill would spend about $1.7 trillion over 10 years. Budget analysts project another roughly $500 billion in tax breaks, putting the total cost at about $2.2 trillion over a decade, higher than earlier estimates from the White House.

The bill includes historic investments in child care and universal pre-K for 3-and-4 year-olds. It would also for the first time give Medicare the ability to negotiate with pharmaceutical companies on the price of some prescription drugs, and offer coverage of hearing aids for seniors, among other things.

“Build Back Better is urgently needed to lower the cost of prescription drugs, health care, child care, and elder care,” Biden said. “Notwithstanding the unrelenting Republican obstruction — not a single Republican is willing to move forward on the bill — I am determined to see this bill enacted into law, to give America’s families the breathing room they deserve. We also need urgent action on climate change and other priorities in the Build Back Better plan.”

However, it’s become unclear if an extension to the child tax credit will be included, given Manchin’s stance.

When a Huffington Post reporter asked Manchin Wednesday if he supported the child tax credit, Manchin lost his temper and did not answer the question.

“This is bullshit,” he said. “You’re bullshit.”

Democrats temporarily expanded the child tax credit earlier this year under the American Rescue Plan from $2,000 to $3,600 for kids under 6, and to $3,000 for kids between 6 and 17.

Republicans have objected to the overall cost of the bill.

The legislation also includes $555 billion in climate spending and tax credits, primarily in the form of $320 billion in new and extended clean energy tax credits.

Rep. Kathy Castor, (D-Fla.), is also urging the Senate to not remove the ban on offshore drilling off the Atlantic, Pacific and the eastern Gulf of Mexico from its version of the bill. Manchin has raised opposition to offshore drilling bans, according to the New York Times.

“We have a moral obligation to urgently reduce our carbon dioxide and methane pollution, which are fueling catastrophic extreme weather events across the country,” Castor said in a statement. “That’s why we must permanently ban drilling on our coasts and address the pollution spewed by hundreds of abandoned, leaky rigs and pipelines in the Gulf of Mexico.”

Senate Majority Leader Chuck Schumer, a New York Democrat, has not yet scheduled a vote on the bill, which is also undergoing scrutiny by the parliamentarian so that it complies with a process called reconciliation, which allows passage with a simple majority in the evenly divided Senate.

Schumer said he met with Biden and other Democratic senators about the Senate stalemate. “All I’m saying is that we had a very good discussion on voting rights and BBB,” Schumer said, according to Capitol Hill pool reports.

Sen. Amy Klobuchar, the Minnesota Democrat who chairs the Senate Rules Committee, said that she had a virtual meeting with the president and vice president, along with Manchin, on passing voting protections.

Immigration policy also hangs in the balance.

The House passed its version of Build Back Better in late November, and wrapped in temporary work and deportation protections through a parole program that allows some undocumented people to change their status to prevent deportation.

The Senate is now waiting for a decision by the Senate parliamentarian, Elizabeth MacDonough, who is nonpartisan and provides advice and help on Senate rules and procedures, on whether the immigration provisions in the package can be passed through reconciliation.

However, the Wall Street Journal reported Thursday night that MacDonough rejected Democrats’ immigration proposals.

Durbin, chair of the Senate Judiciary Committee, said that he was “disappointed” about the parliamentarian’s ruling, according to Capitol Hill pool reports.

“We’re considering what options remain,” he said.

Many immigration advocates and House progressives were not satisfied with those provisions as they pushed Congress to include a pathway to citizenship for millions of undocumented people in the bill.

Democrats have tried to include a pathway to citizenship for millions of undocumented people through the reconciliation package, but were blocked by the Senate parliamentarian from including those provisions.

Many advocates and progressive Democrats have argued that the parliamentarian is merely an adviser and that the Senate could overrule her opinion.

“Throughout the entire reconciliation process, we have worked to ensure that immigration reform was not treated as an afterthought,” Schumer and others said in their statement Thursday night.

“The majority of Americans support our efforts to provide legal status for millions of undocumented immigrants in the United States because it would raise wages, create good-paying jobs, enrich our economy, and improve the lives of all Americans.

“The American people understand that fixing our broken immigration system is a moral and economic imperative, and we stand with the millions of immigrant families across the country who deserve better and for whom we will not stop fighting.”

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