Comment President Biden had his doubts. In private talks with White House officials and congressional allies this spring, he said he worried that voters who never went to college could resent the move to cancel huge amounts of student debt, according to four Democratic officials who spoke under term anonymity to reflect private conversations. Biden also said the federal government should not bail out Ivy League graduates and that his children should not qualify for aid, two of the officials said. “He was nervous about how he would play with working-class people,” said one senior Democrat, recalling the president’s comments at a meeting in the spring. But a relentless campaign was pushing Biden to take dramatic action: There were private calls on Air Force One, a flirtation with first lady Jill Biden, months of political and economic arguments from senior White House officials and warnings from black lawmakers about the dangers of doing too much few. In the end came Biden. It didn’t just eliminate up to $20,000 in debt for most borrowers, an amount many activists thought unlikely. He also defended the idea passionately from the bully pulpit on Wednesday. After six repayment extensions, pressure from Congress and activists, the White House is acting on federal student loans. (Video: Michael Cadenhead/The Washington Post) The result is one of the most significant changes to American higher education policy in decades — and a new cornerstone of the president’s economic legacy. Biden’s decision will dramatically change the financial circumstances of tens of millions of Americans, completely erasing the student loans of about 20 million people. Her political wisdom will be immediately put to the test, with Republicans seizing on her as a key part of their 2022 midterm campaign message. Who qualifies for Biden’s plan to cancel $10,000 in student debt? Despite campaigning to write off student debt, Biden has struggled for months with the right course of action. The president overcame discomfort with a policy criticized as enriching the wealthiest Americans, in part because of evidence presented by White House officials that showed the beneficiaries would be the working and middle classes. The proposal was not only controversial with prominent Democratic economists such as former Treasury Secretary Larry Summers. It was also initially greeted with skepticism by Susan Rice, director of the White House Domestic Policy Council, though she later came around to support it, according to three people familiar with the internal discussions. In a statement, White House Chief of Staff Ron Klein said Rice and Biden have always supported taking significant action on student debt. But the scope of that policy has remained in flux for most of the past year. Biden aides have considered narrower policies that would exclude graduate students, extend the pardon only to those who had attended public universities and limit the pardon to those earning less than six figures. For weeks, the top proposal would have canceled the maximum of $10,000 per student. Finally, however, Biden dismissed those potential restrictions as too modest for the scale of America’s debt. He opted for something far more expansive, endorsing a private White House memo he had prepared for him in July and parting ways with some allies from his centrist Senate career who were quick to distance themselves from politics. The choice partly reflects Biden’s role as a political coalition: It’s done convinced that aggressive student debt relief would give Democrats a better chance of carrying Congress in the fall with a much-needed boost from young voters and people of color. White House aides also compiled private evidence to show that the more targeted plan would do little to eliminate racial disparities. This story of how Biden embraced sweeping debt relief is based on more than two dozen interviews with White House officials, congressional lawmakers, Democratic pollsters, outside financial advisers and student debt activists, many of whom spoke on the condition of anonymity to describe private conversations. “This was the issue that tore apart the financial establishment in the Democratic Party, in and out of government,” said Michael Pierce, who served as deputy assistant director of the Consumer Financial Protection Bureau during the Obama administration and is now at the Student Borrower. Protection Center, which has supported debt cancellation. “But the president decided to go too far.” Calculate how much of your student loan debt can be forgiven
Warren’s allies are reshaping the Democratic Party Biden was a late convert to the cause of student debt relief. The idea first emerged from Occupy Wall Street and the fringe left after the financial crisis of 2008. For years, only a handful of lawmakers supported the idea. Democrats have broadly agreed on the need to cap college tuition, and the Obama administration has supported several proposals — such as expanding Pell grants, a form of federal financial aid used primarily by low-income students — aimed at lowering the price of higher education. education. But the retroactive write-off of existing student debt was revised in mainstream Democratic policy circles, where party economists viewed it as a radical step with little precedent. That began to change thanks to the work of a group of activists — many of whom were deeply indebted — backed by Sen. Elizabeth Warren (D-Mass.). Proponents of the “debt jubilee” argued that tuition reform would do little for graduates already saddled with mountains of debt and battered by a job market that has been weak for years after the recession. Seeking to capitalize on that frustration, Warren and Sen. Bernie Sanders (I-Vt.) unveiled aggressive student debt cancellation planks in their 2020 presidential campaigns. Aiming to unify the Democratic Party after the bruising 2020 primaries, Biden approved debt cancellation of at least $10,000 per borrower after winning the nomination. When he took office, Warren’s allies secured key administration positions on economic and education policy: Julie Morgan, a Warren aide who developed the legal rationale for debt relief, became deputy undersecretary at the Department of Education; Richard Cordray, Warren’s former adviser at the Consumer Financial Protection Bureau, has been named chief operating officer at the Office of Federal Student Aid. Bharat Ramamurti, Warren’s 2020 economic policy chief, has joined the White House National Economic Council as deputy director. Ramamurti in particular would later prove instrumental in convincing Biden to back the debt cancellation amid skepticism from other parts of the administration, as part of a team led by Rice and other senior White House officials Carmel Martin and Brian Deese. “Working with the Biden transition to get key people across the White House and in places like the Department of Education set the stage for a lot of allies to be in the room as this was being discussed,” said Adam Green, a Warren ally. Who has student loan debt in America? But these forces did not go unchallenged. The slim Democratic majority in the Senate made it impossible to pass $10,000 in debt relief through Congress. For more than a year, high inflation has weighed on the president’s approval, and critics have argued that hundreds of billions in debt relief could prompt beneficiaries to spend more money, further raising prices. Negotiations with Sen. Joe Manchin III (DW.Va.) over the party’s domestic policy agenda proved another hurdle, with senior Democrats wary throughout the summer of upsetting the lawmaker. Democratic pollsters presented the administration with data from focus groups indicating that voters who had paid off their loans would be upset by the significant loan write-off. Publicly, Biden himself held the $10,000 line. “I’m ready to write off $10,000 in debt, but not $50,” he said, later adding, “My daughter went to Tulane University and then got a master’s degree at Penn. He graduated $103,000 in debt … I don’t think anyone should have to pay for that.” The concerns were not only political. Careers staff at the Ministry of Education felt that they were being asked to take on too much at once and would struggle to manage it all. Center Democrats worried that the plan would be too generous to Americans who don’t need help. As rumors swirled about possible debt cancellation, Sen. Michael F. Bennet (D-Colo.) argued on the Senate floor that the relief should be targeted more directly at the lowest income earners. Bennett later told senior White House officials that the loan relief could greatly help wealthy Americans, a person familiar with the matter said. Bennett issued similar criticisms publicly on Wednesday after the White House released his plan. Biden also faced blowback from prominent Democratic economists — particularly Summers — who had championed the president’s “Build Back Better” agenda after initially criticizing the White House’s $1.9 trillion pandemic relief plan last year. price. Biden has often emphasized that the Inflation Reduction Act would reduce the federal deficit, but projections from budget analysts indicated that student debt relief would erase some of those fiscal gains. “During the BBB, there were a lot of policies that people on the center left knew were irresponsible but didn’t want to criticize because they wanted to be team players,” said Ben Ritz, director of the Center for Financing America’s Future at Progressive Policy Institute. , citing complaints about expensive and controversial proposals. Now, he said, opponents aren’t willing to keep quiet about their objections to Biden’s student loan plans. “Centrist Democrats are largely aligned that this was a mistake.” Those warnings appeared to limit the ambition of the White House’s debt relief plan. But this was before a crucial meeting with…
