Thursday, May 05, 2022

Biden’s Team Eyes $125,000 Income 
Cut-off for Student Loan Relief



Jennifer Jacobs and Justin Sink
Tue, May 3, 2022,

(Bloomberg) -- President Joe Biden is considering limiting his program to relieve student debt to Americans earning less than $125,000, White House Press Secretary Jen Psaki said Tuesday.

Biden said last week he would soon take executive action to forgive some student debt. White House officials have previously said the plan would relieve at least $10,000 of debt per borrower, and that they expected the program would include income restrictions.

Psaki offered $125,000 as a possible threshold in a briefing for reporters traveling with the president to a weapons plant in Alabama.

The president has been prodded by progressives including Democratic Senator Elizabeth Warren to forgive at least $50,000 per borrower, but Biden has said he won’t relieve that much debt by executive action. He proposed eliminating $10,000 per borrower during his presidential campaign.

The Biden administration has repeatedly extended a temporary freeze on student debt payments enacted shortly after the pandemic began in 2020.

White House aides have said the president hoped Congress would take legislative action on student debt relief, and that his team has been divided on the merits of broad forgiveness. Some deficit hawks have expressed concern that broad relief would worsen inflation already weighing heavily on Democrats’ political fortunes in November’s midterm elections.

Student loan forgiveness: McConnell 

decries 'student loan socialism'

as Biden mulls move


As President Joe Biden mulls enacting some student loan forgiveness, Senate Minority Leader Mitch McConnell (R-KY) blasted him for even considering such a move.

“Student loan socialism would be a giant slap in the face to every family who sacrificed to save for college, to every graduate who paid their debt, to every worker who made a different career choice so they could stay debt-free,” McConnell said on the Senate floor on Thursday.

The prominent Republican added that instead of “trying to help middle-class families, Democrats are cooking up massive bailouts for Ivy League graduates. You can hardly dream up something more unfair.”

Senate Minority Leader Mitch McConnell (R-KY) participates in a Pop-Up Conversation with Punchbowl News at the AT&T Forum on March 31, 2022 in Washington, DC.  (Photo by Chip Somodevilla/Getty Images)
Senate Minority Leader Mitch McConnell (R-KY) participates in a Pop-Up Conversation with Punchbowl News at the AT&T Forum on March 31, 2022 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)

The president is reportedly considering forgiving at least $10,000 in federally-backed student debt for each borrower with income less than $125,000 or $150,000 as individual tax filers in the previous year (and double the amounts for couples filing taxes jointly).

McConnell argued that cancellation was a misguided policy with inflation pushing up household costs, noting that some American taxpayers who would be paying for the policy did not pursue higher education.

The longtime Republican leader also revisited a period of time in recent history when the president was reluctant to cancel debt via executive action.

“A little more than a year ago, President Biden was saying ‘I don’t think I have the authority to do it by signing with a pen,' McConnell stated, later adding: "But apparently, lackluster poll numbers have the president considering breaking the law and plowing ahead anyway.”

President Biden, who backed broad student loan forgiveness of $10,000 on the campaign trail in 2020 amid more generous proposals from then-rivals Sen. Bernie Sanders (D-VT) and Sen. Elizabeth Warren (D-MA), had initially been reluctant to forgive student debt through executive action prior to recently.

Then-Vice President Joe Biden and Then-Senate Majority Leader Mitch McConnell make their way to the House floor for President Obama's State of the Union address on January 12, 2016. (Photo By Tom Williams/CQ Roll Call)
Then-Vice President Joe Biden and Then-Senate Majority Leader Mitch McConnell make their way to the House floor for President Obama's State of the Union address on January 12, 2016. (Photo By Tom Williams/CQ Roll Call)

“Democrats want construction workers, police officers, and small business owners in Kentucky to effectively eat the student loans of surgeons, corporate lawyers, and people in New York City who chose to borrow $180,000 for a master’s from the Columbia Film School with no plan whatsoever for paying it back,” McConnell said, seemingly referring to a 2021 Wall Street Journal report that spotlighted the high cost of graduate degrees such as a master's in film from the Ivy League institution.

Biden changed his tune, telling reporters on April 28: "I am considering dealing with some debt reduction. I am not considering $50,000 debt reduction. But I’m in the process of taking a hard look at whether or not there are going to — there will be additional debt forgiveness, and I’ll have an answer on that in the next couple of weeks."

Democratic lawmakers argue that canceling debt has much a more transformative effect than what Republicans believe.

"Democrats win when we deliver, and we have to deliver in ways that are impactful, tangible, and transformative, like canceling student debt," Congresswoman Ayanna Pressley (D-MA) said in a Yahoo Finance Presents interview (video above). "This is good policy, and it is also good politics."


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