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Biden rejects Democratic plan to wipe out $50,000 in student loan debt


  • Biden bluntly rejected a Democratic plan to forgive up to $50,000 in student loan debt on Tuesday.
  • “I will not make that happen,” he said at a CNN town hall event, adding he didn’t believe had the unilateral authority to do it.
  • The plan was put forward by Sens. Elizabeth Warren and Chuck Schumer.
  • Visit the Business section of Insider for more stories.

President Joe Biden effectively rejected on Tuesday evening a Democratic plan put forward by Sens. Elizabeth Warren and Chuck Schumer to wipe out up to $50,000 in student loan debt per borrower. Instead, he said he backed a measure to provide up to $10,000 in forgiveness.

“I will not make that happen,” he said of the $50,000 relief measure. Instead, he told a CNN town hall audience he believed loan forgiveness “depends on whether or not you go to a private university or a public university.”

Biden said he was reluctant to forgive debt for people who attended elite institutions, listing Harvard University, Yale University, and the University of Pennsylvania as examples. He also said each of his three children graduated with a six-figure debt load and paid it off over time.

“I don’t think anybody should have to pay for that, but I do think you should be able to work it off,” he said. “I understand the impact of the debt, and it can be debilitated.”

Instead, the president touted a proposal to provide free community college to families earning less than $125,000 each year. “Everyone should be able to go to community college for free,” he said. “That costs $9 billion, and we should pay for it.”

He later said: “I’m prepared to write off $10,000 in debt, but not 50. I don’t think I have the authority to do it by the sign of a pen.”

The $10,000 loan forgiveness measure does not form part of Biden’s $1.9 trillion rescue package, which is now making its way through Congress. Biden has ordered the Education Department to pause all federal student loan payments through Sept. 30 and waive interest.

Many Democrats are urging Biden to take aggressive action to cut student debt. Schumer and Warren introduced their plan earlier this month, arguing it’s a critical step to rein in inequality and strengthen the economy.

“There is very little that the president could do with a flick of a pen that would boost our economy more than canceling $50,000 in student debt,” Schumer told reporters. “This is one of those things the president can do on his own.”

White House press secretary Jen Psaki said at a news conference on Feb. 4 that the Biden administration would favor legislation from Congress to provide loan forgiveness instead of taking executive action. 

The Biden administration said they are reviewing whether that route is possible.

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