President Joe Biden speaks in the East Room of the White House on June 2, 2022.
Al-Draco | Bloomberg | Getty Images
The Biden administration is unlikely to announce a decision on student loan forgiveness before the end of the summer, The Wall Street Journal reported Monday.
The more than 40 million Americans struggling with student debt are anxiously awaiting news after President Joe Biden said in May he would share his plans within the next two weeks.
The White House pardon announcement is expected to come in July or August, according to the Wall Street Journal.
The most likely cause of the delay is intense deliberation — and disagreement — among officials over the political and financial drivers of canceling billions of dollars in education debt. There is no precedent for such an approach.
The country’s $1.7 trillion outstanding student loan balance exceeds credit card or auto debt, and a quarter of borrowers were already behind on their payments before the pandemic public health crisis.
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During the election campaign, Biden said he was in favor of clearing borrowers’ accounts by $10,000. It would cost about $321 billion and completely cancel the loans of about a third of student borrowers.
Still, there are fears that such an announcement will cause more frustration and disappointment than anything else. The average student debt balance, after all, is three times higher, at around $30,000.
As a result, top Senate Democrat Chuck Schumer of New York — along with Sen. Elizabeth Warren, D-Mass., and other Democrats — is pushing the president to set aside at least $50,000 for all.
The NAACP also explained that $10,000 would not go far enough for black student borrowers. Wisdom Cole, national director of the association’s youth and middle school division, recently said on Twitter that nixing just $10,000 would be “a slap in the face.”
But no amount of forgiveness would leave all borrowers happy.
Even if $50,000 per borrower were wiped out, the more than 3 million borrowers who have more than $100,000 in the red would still be stuck with large balances.
Many Americans are infuriated by the idea of any student debt forgiveness, including those who never borrowed for college or went to college. Some Republicans have said they will try to block an attempt by the president to cancel the debt.
In the meantime, federal student loans continue to be suspended until at least the end of August, as part of a pandemic-era relief policy that began in March 2020. Data shows nearly all borrowers have stopped making their payments.