Hispanic Caucus: Biden weighing student loan forgiveness before midterms

President Joe Biden signaled to Democratic lawmakers that he is seriously considering executive action on student-loan debt relief, according to officials familiar with the discussions.

Members of the Congressional Hispanic Caucus, which is composed entirely of Democrats, said they “felt confident” that Biden was warming up to calls by progressives to forgive some debt held by borrowers with federal student loans, according to The Wall Street Journal.

No plans or promises were made in the meeting, but Biden responded positively to the proposal of forgiving $10,000 in student loan debt per borrower, the people said. The president endorsed cancelling that amount during his 2020 campaign.

Biden also indicated he is open to further extending the current pause on student loan payments, which began Mar. 13, 2020 and set to expire in Aug. 31.

However, the administration expressed concerns about messaging the decision correctly to avoid associating it with inflation, one source said. Some Democrats believe the issue could help turn out young voters, who tend to lean progressive, to the polls in November, according to WSJ.

About 40 million borrowers owe about $1.6 trillion in federal student loan debt, which accounts for around 90% of all outstanding student debt. Student loans from private lenders were not eligible for the pause in payments.

Advocates of student-loan forgiveness say it would help minorities, as studies showed that Black borrowers were most likely to face long-term financial burdens from their debt.

Critics argue forgiveness would benefit the wealthy much more than the poor. A study by the Brookings Institution found that almost a third of U.S. student debt was owed by the wealthiest 20% of households, while the bottom fifth owe less than 10% of such debt.

Conservatives have also attacked the fairness of using taxpayer money of those who did not attend college to pay the debt of those who did.

“Why should a trucker who didn't go to college have to pay off a lawyer's student loan debt?,” Senator Tom Cotton (R-AK) tweeted in response to the news.

“Because that is what Biden is proposing when he says he will ‘forgive’ student loan debt.”

Why should a trucker who didn't go to college have to pay off a lawyer's student loan debt?

Because that is what Biden is proposing when he says he will "forgive" student loan debt.

— Tom Cotton (@TomCottonAR) April 26, 2022