As the Biden administration creates a plan to cancel Some student debtAdministration officials are reportedly concerned that adding income caps could make the whole plan more difficult logistically, which could compromise its effectiveness.
As Politico reports, officials in President Joe Biden’s Education Department are saying in private conversations that it would be extremely difficult for the agency to implement the administration’s tentative planIncome is a limit on student loan forgiveness. The agency simply doesn’t have income information for the vast majority of student loan borrowers, sources told Politico.
If the Biden administration wanted to put some form of means-testing on the plan, the Education Department could force borrowers to show proof of income in any application process. This extra step could make it difficult to implement the program in the timeframe allowed, if at all.
An Education Department spokesperson said that the agency is assessing options for “broad debt cancellation.” The White House has yet to finalize its plan.
This month, White House Press Secretary Jen Psaki saidBiden is contemplating limiting debt cancellation to borrowers with incomes below $125,000 per annum. The cap is designed to counter conservative arguments that only the wealthy would be eligible for student loan forgiveness. These claims have been proven falseA report earlier this month found that student loan forgiveness would be progressive. This would mean that the least fortunate borrowers would get the greatest benefits.
The news of the income cap has caused frustration among progressives debt advocatesThis is exactly what the advocates for debt forgiveness have warned about. They claim that applying means test to the debt forgiveness program would not only be unpopular with borrowers but would also put unnecessary hurdles in the way of the program, which could limit access for those who really need it. Debt forgiveness advocates were Already frustratedBiden will likely cancel only a small amount of the roughly $1.9 trillionBorrowers owe student loans.
“The simplest way to implement student debt cancellation is to make it fully automatic and universal,” Braxton Brewington, Debt Collective spokesperson, said in a statement. “Forcing millions to apply for their rightfully owed cancellation will exclude the exact borrowers a targeted approach claims to help. Biden doesn’t need to be reminded that burying borrowers in paperwork and the Education Department is wildly ineffective. 99 percent denial rate of current programs like Public Service Loan Forgiveness,” or the PSLF program.
The PSLF program is supposed allow teachers and public servants to apply for student loan forgiveness after a decade of service. However, the Government Accountability Office (GAO), which reviewed the program in 2019, found that it is severely burdened by its eligibility requirements. It rejects nearly every application it receives. Melissa Emrey Arras, who was responsible for the GAO report’s preparation, called it a “bureaucratic nightmare.”
If a wider student loan cancellation was implemented in a similar fashion, it could backfire upon the Democratic Party, which is keen to win over voters before midterms. The majority of Americans do not believe in student loan cancellation. support some form of student loan forgiveness, polls have foundThe possibility of student loan forgiveness could encourage people who are likely voters to vote Democrat to the polls this fall. In the meantime, a means-tested program is in place This could be the key to the success of your idea less popular.
“The landmines on this are everywhere,” Bryce McKibben, former policy adviser to Senate Health, Education, Labor and Pensions Committee member Sen. Patty Murray (D-Washington), told Politico. “Their options are: an income cap and political train wreck — or no income cap and broader, automatic-based relief for everyone. There’s not a lot in between.”
Progressive Representatives Mondaire Jones (D-New York) and Ayanna Pressley (D-Massachusetts) also told the publication that the cancellation should be broad and “reach as many people as possible,” as Pressley said.