President Biden today announced his long awaited plan on student
debt and historic move to address the $1.6 trillion in federal loans
held by 45 Million Americans. In the plan. Borrowers making less
than 125,000 year will be eligible for $10,000 in forgiveness for
Pell Grant recipients that goes up to $20,000 in an effort to help
those with the greatest need.
And the president also extended the payment pause one final time
through the end of this year. In remarks today, the president anticipated
opposition from Republicans and said the relief was targeting low
and middle income Americans.
I will never apologize ever helping Americans working working America's
middle class?
Especially not to the same folks who voted for a $2 trillion tax
cut that mainly benefited the wealthiest Americans. And the biggest
corporations that slowed the economy. Didn't do hell Watford economic
growth and wasn't paid for and racked up this enormous deficit. White
House correspondent Laura Barone Lopez has been following it all.
She joins me here, Laura. Good to see you. Good to see you. Big picture.
How big a deal is this? What's the significance? So President Biden
it took
Come a long time to get to this decision, but it ultimately went
further than what many expected and so a big piece of this is what
it did for those Pell Grant recipients.
Ah, the student loan forgiveness for them is, as you noted 20,000
forgiveness if they're making less than $125,000 a year, roughly
two thirds of federal loan borrowers are Pell Grant. Recipients in
black borrowers are twice as likely to receive Pell grants as white
borrowers. And just a reminder is that Pell grants are federal tuition
aid that doesn't necessarily have to be paid back for low income
Americans and this addresses additional loans that they took out
on top of that, you know, the White House argues that
Grants no longer cover the same amount of tuition that they used
to cover.
And we spoke to Braxton Simpson today who is a student who has some
$40,000 in student debt. She's also an activist who works for an
advocacy group that is really trying to make college more affordable.
And here's what she had to say about how it impacts her.
When you come out of college and you start a new job, and you're
starting your new life, Um there's a lot of things that are being
thrown at you. You're really focusing on adult ng. You're picking
up bills. You're trying to figure out you know what's your next meal
is going to be so, um having, of course, the cancelation of the $10,000
definitely helps to bring that and scale that down. Um, makes things
that seem a little bit more attainable.
So for borrowers like Braxton, who are looking to get relief, it's
their 2020 and 2021 tax years that will be assessed when they apply.
And President Biden also said today that the Education Department
will release a short and simple form in the coming weeks for people
to apply for this relief. We know some folks wanted the White House
to go further, right Progressives have been calling for up to $50,000
in forgiveness. How did the White House
Get to this number and water progressives saying about the plan now
so up until essentially today, progressives had been in President
Biden's ear had been in the the years of White House staff, telling
them to go further because what everyone was expecting was for President
Biden to forgive the 10,000 in student debt. But this 20,000 for
Pell grants that took it a step further further and was something
that progressives were fighting for a lot. And I also spoke to wisdom
call of the ACP today and
He said that he's looking for the White House to go even a step further.
This is a great first step in the right direction. Um, and the fight
to cancel student debt. You know, we've been fighting for
No quite some time now pushing the administration to cancel a minimum
of 50,000 or more the idea that now we are really having an open
conversation around what is possible and really dreaming about a
future where that is not going to be something that is going to be
holding back millions and millions of black and brown barbers around
the country who are wanting to see a better future, wanting to become
homeowners, business owners and have discretionary wealth building
income.
And so like wisdom. Cole, who leads their youth division for the
end of a lot of progressives are going to reset once those payments
start again next year and start pushing the White House to potentially
forgive even more for non Pell Grant recipients. So the administration
announces this loan forgiveness. They also announced changes to how
loans are to be repaid. Right tell us about that. So this is another
big component, and this is essentially new income based repayment
plan. And so what this does is
That makes it so borrowers repay 5% of their disposable income per
month rather than 10%.
No monthly payments for people making less than approximately $15
an hour. It forgives loans of 12,000 or less after 10 years instead
of 20 and no monthly interest for people making their repayments
among the critics. We should note. There are people who say this
will worsen inflation, right? Do we know
What kind of impact it could have on the economy. So the White House
came out prepared for those arguments. And essentially what they're
saying is that the loan repayments starting next year happening at
the same time as there's targeted debt relief, they argue, it's going
to offset. They also say that the economists that they're talking
to be it at analysts. Firms like Moody's that that it will be neutral
or D inflationary. Now, of course, there are a number of economists,
even democratic ones that don't agree.
We with that the committee for the Responsible Federal Budget actually
estimated that it would cost some 400 to $600 billion. And so I spoke
to Jason Furman and economists and Democrat who worked for the former
president Obama and he was not happy with this announcement today.
I think this is a
Terrible policy for the point in time. Where in as a country it's
nearly half a trillion dollars of gasoline being thrown on what is
already and inflationary fire that we're dealing with. The economy
cannot absorb this money without generating more inflation without
generating bills that will have to be paid in the future.
As well. So you're helping one group in the country and hurting a
lot of other people in the process.
The White House's response to that is essentially that this is something
that the president believes is fair. It's something that he wanted
to take action on now again. He initially wanted Congress to do this.
He didn't want to have to use his executive action to forgive the
10,000 in student debt, but ultimately felt that it was necessary.
You mentioned fair and there has been this question around fairness,
right? We've heard it from the beginning of the talk about student
loan forgiveness from Republican lawmakers. Also, there was a reporter
who
Shouted out a question to President Biden on this.
People who argue this is unfair to people who didn't go to college
or people who have already paid back their loans. What is the White
House say to that? So first, I think we need to look at how popular
the The provision is, which is actually recent polling from NPR found
that the $10,000 in forgiveness alone is actually what's popular
with the American public. Some 55%
Of Americans supported 35% do not support it. But going beyond that
is where things can become less popular with the American public.
And so again, some Democrats like Jason Furman agree with Republicans
who are saying that this this isn't necessarily fair. And what about
the students who already repaid all of their loans? And so he said
that it could definitely become difficult for the White House to
explain that
We're very constrained as a country Who is your priority to help.
Is it a couple making $250,000? Is it a single 24 year old making
$75,000? I just don't think those should be the top priorities for
policy makers.
Now. Ultimately again, we have spoken to a lot of students across
the country in the past year. Students like Braxton Simpson, and
they say that every time I ask them, what's the one thing that you
would like to see from President Biden now that he was elected to
office in the first words out of their mouth or student debt, And
so this is what this is what Braxton Simpson had to say in response
to that fairness question.
I think that students everywhere are going to be excited about that.
It's probably going to get them out to vote, knowing that there is
a possibility and that the administration does have them on their
mind when it comes to their education, funding their education and
allowing students not to focus solely on funding their education
and having to work to make ends meet just to go to school but being
able to actually focus on school itself.
And so, just like Braxton, that's a big thing that Democrats are
thinking could potentially play well with young voters. President
Biden's numbers with Gen Z Voters with Millennials has not been good
in recent months. And so potentially, you know, a number of Democratic
strategist I've spoke to say that these voters, these young voters
are going to be key, potentially in swing states heading into November,
and we'll see how much of a difference it makes. Or doesn't Laura