Democrats have been pushing President Joe Biden to cancel $50,000 in federally-held student loan debt for roughly 43 million Americans through executive order. The president is not planning on doing that.
"I will not make that happen," Biden said during a CNN town hall on Tuesday night when asked if he would support cancellation of $50,000, adding that it "depends on whether or not you go to a private or public university" and that he’s opposed to saying that he was going to “forgive the debt, billions of dollars of debt, for people who have gone to Harvard and Yale and Penn.”
Forgiving $50,000 for each borrower would cost roughly $1 trillion. The president argued that money would be better used "to provide for early education for young children who come from disadvantaged circumstances" and free community college.
Democrats were not happy with Biden's latest statements, a version of which he has made before and even noted at the time that he was "going to get in trouble for saying this."
Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) issued a joint statement asserting that an "ocean of student loan debt is holding back 43 million borrowers and disproportionately weighing down Black and Brown Americans. Cancelling $50,000 in federal student loan debt will help close the racial wealth gap, benefit the 40% of borrowers who do not have a college degree, and help stimulate the economy. It’s time to act. We will keep fighting.”
On Wednesday morning, Representative Alexandria Ocasio-Cortez (D-NY) tweeted: "1. Who cares what school someone went to? Entire generations of working class kids were encouraged to go into more debt under the guise of elitism. This is wrong. 2. Nowhere does it say we must trade-off early childhood education for student loan forgiveness. We can have both."
Ocasio-Cortez, who had earlier this month told her Instagram followers to not lose hope on potential student loan forgiveness, added that the momentum to get cancellation has intensified.
"The case against student loan forgiveness is looking shakier by the day," she added in a follow-up tweet. "We’ve got the *Senate Majority Leader* on board to forgive $50k. Biden’s holding back, but many of the arguments against it just don’t hold water on close inspection. We can and should do it. Keep pushing!"
President Biden noted that while he was not comfortable forgiving $50,000 in student debt per borrower, he does support cancelling $10,000 per borrower at an estimated cost of roughly $371 billion.
"I understand the impact of the debt and it can be debilitating," Biden added. "But I do think that in this moment of economic pain and strain, that we should be eliminating interest on the debts... [and] I'm prepared to write off $10,000 debt but not [$50,000]."
Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.
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