Biden Allies Keep Up Pressure for $50,000 in Student Loan Relief

(Bloomberg) -- A close ally of President Joe Biden said congressional Democrats will keep up pressure on him to use his executive authority to forgive as much as $50,000 in student loan per borrower rather than the more limited plan being considered by the White House.

“When you see a student coming out of college -- law school or professional schools -- with $130,000, $150,000 in debt, that cripples the economy in more ways than one,” Representative James Clyburn, a South Carolina Democrat, said in an interview Saturday. “So the extent to which you can give some relief I think will stimulate the economy in many ways.”

Biden said last week that he plans to take action on student loans, but that he's not considering the $50,000 threshold backed by Democrats including Clyburn, Senate Majority Leader Chuck Schumer and Massachusetts Senator Elizabeth Warren.

The White House is considering forgiving at least $10,000 in student loans per borrower, though the administration hasn't yet settled on the details. The discussions are focusing on targeting relief for lower- and middle-income individuals.

Clyburn would like him to reconsider.

“I think students are deserving of that simply because in past years what we have found is that when given the opportunity, the forces that be have ratcheted up interest and all sorts of fees on student loans,” he said.

Over 43.4 million borrowers have federal student-loan debt, according to the Education Data Initiative, totaling on average $37,113 per borrower for federal student loans and $40,904 including private debt. The Federal Reserve says outstanding student loan debt totals more than $1.75 trillion, about 92% of which is in the hands of the federal government.

Administration aides say the president had hoped Congress would take legislative action, and his team has been divided on the merits of broad student debt forgiveness, which is being attacked by Republicans as potentially inflationary and as unfair to those who've paid off their loans.

But the issue has broad support among Democrats from moderates like Clyburn to progressives like New York Representative Alexandria Ocasio-Cortez.

Given Republican opposition, a legislative solution is unlikely any time soon. That's why Clyburn and others are pressuring Biden to act.

“There's a lot of things that you can do by executive order and it's only limited by court interpretation,” Clyburn said. “So my whole thing is, use your executive authority and let the courts have at it.”