Biden, Student Loans and What’s Next
The election of President Joe Biden was supposed to release a fresh breath of air following the tumultuous four-year reign of Donald Trump. Yet at a recent CNN town hall in Milwaukee, Biden wilted at the opportunity to introduce drastic changes to tackle America's crippling student loan crisis, raising doubts about whether the new President is really a break from the status quo.
It has been proposed that a student loan forgiveness initiative will be enacted that will see $10,000 wiped off each student’s debt, but many people have questioned if it is really enough. ‘We need at least a $50,000 minimum. What will you do to make that happen?’ asked Jocelyn Fish, a marketing director for a community theatre. The president replied dismissively: ‘I will not make that happen.’
The American economy has been in the grips of a debilitating debt crisis, with 14% of all American adults being submerged in student debt. Outstanding debt amounts to over $1.6 trillion, with 2/3 of college students being indebted compared to below 50% in the 1990s. An incredible 28% of borrowers are in delinquency or default on their payments and it is time that the White House recognise the reality that student loan chains many young people in years of financial hardship.
Biden’s primary justification for his refusal is plainly derisory and casts doubts over the President’s willingness to truly tackle one of America's most pressing issues. He states ‘I am prepared to write off the $10,000 debt but not $50 [thousand] because I don't think I have the authority to do it’, an attempt to deflect accountability onto Congress to avoid reproach for his reluctance to instil meaningful change. Biden undeniably has the jurisdiction to exercise his executive power to cancel federal student debt. The Higher Education Act of 1965 hands the President the authority over this action and Donald trump even exercised his power to do so, using it three times to suspend payments on student loans. This raises a question: if Biden has the legal power to do so, why is he refusing to?
The Democrat goes on to produce an even more incoherent argument, suggesting that introducing such measures would disproportionately benefit students in Ivy League universities. Biden is attempting to appeal to the more disadvantaged, dishonestly trying to give the impression that he represents their best interests. Yet when we delve into the facts, this line of reasoning holds no weight. A measly 0.3% of federal student borrowers attended Ivy League colleges, according to an estimate by higher education expert Mark Kantrowitz, compared to 25% who attend non-profit colleges and a massive 49% of borrowers who attend public colleges. Does it really make sense to continue to subjugate disadvantaged students to the tribulations faced by large debts to prevent the slight gains of the very few students who attend an Ivy League institution? Furthermore, does Biden even recognise the fact that some disadvantaged students attend Ivy League institutions, meaning that introducing a larger student loan forgiveness initiative would actually benefit them? It has become apparent that Biden is unwilling to introduce radical change and would rather continue to follow a policy deployed by his Republican predecessor.
Black voters made up 11% of the national electorate, and, according to AP VoteCast, 9 in 10 of them supported Biden and it is necessary to recognise how important this demographic was to the Democrats’ success in 2020. Introducing a $50,000 student loan forgiveness would be one step in helping to close the racial wealth inequality gap. African American graduates have an average of $52,726 in student debt, compared to $28,006 for white students according to the White House Initiative on Education Excellence for African Americans. Wiping $10,000 would hardly reduce the struggle of student debt for many black Americans compared to their counterparts who would have just under half of their loan forgiven. Debt is one of the key restraints on the economic development of black Americans as it makes it significantly harder to enter the housing market and engage in entrepreneurship, as they are less likely to have monetary support from their family. The ramifications of introducing such a large student loan forgiveness would be monumental and would free many African Americans from the restraints of debt. It is only right that Biden begins to pay back the faith of his supporters.
What is clear, however, is that Biden is either ignorant of the possibility of the massive financial gains that the USA could acquire through the large-scale forgiveness of student loans or this issue represents a snapshot of how spineless Biden is when it comes to tackling relevant issues. The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act made it extremely difficult for struggling recipients of loans to discharge their debts - an Act that was voted and agitated for by Biden. Biden aided the rapid growth of student loan debt, and the time has come for him to admit fault. He must act, and act quickly, to rectify the situation he helped to create.