This is how you could pay off your student debt in the US 3:06
Washington (CNN) --
President Joe Biden has a student loan forgiveness problem.
Lawmakers within his party continue to bring the issue to the fore, urging the president to write off $50,000 for each of the 43 million federal student loan borrowers, something he has repeatedly rejected, including on Thursday.
Biden has already canceled more student loan debt than any other president, making it easier for students defrauded by for-profit colleges or those working in the public sector to have their debt forgiven through existing relief programs.
The president also recently extended the pandemic-related payment suspension for the fourth time under his administration, moving the due date from May 1 to August 31.
But these measures have not served to relieve political pressure.
Biden's latest change on student debt will move 3.6 million borrowers closer to loan forgiveness
On Wednesday, Senate Majority Leader Chuck Schumer again called on Biden to write off $50,000 of each federal borrower's student debt through executive action.
"Borrowers not only need their debt put on hold, they need it eliminated," Schumer said from the Senate floor.
advertising
"With a simple signature, President Biden could offer millions and millions of borrowers a new opportunity," added the New York Democrat.
The pressure is mounting in a midterm election year and at a time when the latest polls show Biden's approval ratings continuing to slide among younger Americans.
Activists attend a student loan forgiveness rally near the White House on Wednesday, April 27, 2022.
More than 100 congressional Democrats signed a letter sent to Biden last month urging him to "pay off a significant amount of student debt."
A handful of progressive lawmakers, including Sen. Bernie Sanders of Vermont and Rep. Pramila Jayapal of Washington state, appeared with advocates of canceling student debt outside the White House on Wednesday to show their support.
So far, Biden has resisted pressure to write off $50,000 of student loan debt for each applicant.
On Thursday, he reaffirmed his position, although he left the door open for some kind of cancellation of student debt.
"I am considering the possibility of addressing some type of debt reduction. I am not considering a $50,000 debt reduction," Biden said at the White House after revealing new financing for Ukraine.
Biden asks the US Congress for more funds to support Ukraine
"But I'm in the process of really looking into whether or not there's going to be...if there's going to be additional debt relief, and I'll have an answer on that in the next few weeks."
Later on Thursday, White House press secretary Jen Psaki confirmed that "no process has yet been concluded internally."
There are several reasons why Biden may be resisting pressure from the left wing of his party.
Legal authority is unclear
Biden made it clear during his presidential campaign, after the start of the covid-19 pandemic, that he supported the partial cancellation of federal student debt.
His campaign proposal called for the immediate forgiveness of a minimum of $10,000 of student debt per person in response to the pandemic, as well as the forgiveness of all federal student debt related to tuition at public two- and four-year colleges for those borrowers earning up to $125,000 a year.
But he also urged Congress to take action to write off the debt, rather than saying he could use executive power to do so.
It's not entirely clear that the president's executive authority allows him to largely eliminate student debt.
Last year, Biden directed lawyers from the Education and Justice departments to assess whether he, in fact, has the power to broadly write off federal student loan debt.
The administration has not disclosed the results of its investigation of him.
But a September 2020 memo from lawyers at the Harvard University Legal Services Center and the Project on Predatory Student Lending argues that Congress has given the power to write off federal student debt broadly to the Department of Education through a law known as the Higher Education Law.
This law gives the secretary of education the authority "to create and cancel or modify the debt of federal student loan programs," the memorandum says.
Inflation is a key issue for voters
It may sound counterintuitive to borrowers who would benefit from debt forgiveness, but some experts say student loan forgiveness would increase inflation.
This is a problem for Biden and other Democrats, who are blamed for rising gas and grocery prices.
Millions of people could spend money, roughly $4 billion a month total, on things other than their monthly student loan payments.
And people might be more likely to make big purchases, like cars or houses, if they no longer have to worry about student debt.
Inflation: everything you need to know about this economic phenomenon
A report by the Commission for a Responsible Federal Budget estimated that writing off the $1.6 trillion in federal student loan debt would increase the rate of inflation by 0.1 to 0.5 percentage points over 12 months.
Paying off $50,000 per borrower would be a smaller increase, but the group did not estimate that effect.
"It's not huge," said Marc Goldwein, senior vice president and policy director for the Commission for a Responsible Federal Budget.
"In a normal inflation environment, it would not be a big problem. But now we are in a very precarious situation and we run the risk of inflation getting out of control," he added.
Debt cancellation could benefit many wealthy
Biden has repeatedly said he is committed to rich Americans paying their fair share and has proposed raising taxes on the wealthiest.
Canceling student debt could run counter to that policy goal.
Canceling student debt for all would disproportionately benefit wealthier households, such as those with doctors and lawyers, because those borrowers tend to have more student debt after attending graduate school.
In 2019, households with graduate degrees owed 56% of outstanding educational debt.
A more targeted approach, such as debt cancellation for borrowers below a certain income threshold or cancellation of loans just for degrees, could help ensure that more of the benefit is reaching the neediest Americans.
"If even a basic screening were done, more of the money would go to low-income borrowers," said Adam Looney, a nonresident fellow at the Brookings Institution who has studied student debt relief policies.
Still, canceling student loan debt would not solve the fundamental problem of college affordability.
Biden also campaigned for free community colleges, a measure that would require an act of Congress, but that proposal was cut from his Build Back Better program.
"If the system is not fixed, these problems will come back and we will be back in the same crisis as we are now," Looney said.
Find out if you're eligible to apply for student loan debt relief after Biden's latest actions
Biden has signaled that he would be open to excluding high-income borrowers from student loan debt cancellation, arguing last year that the government should not forgive the debt of people who went to "Harvard, Yale and Penn." .
Psaki said Thursday that the president is still considering some sort of socioeconomic study when it comes to loan cancellations.
"He's talked in the past about how he doesn't think millionaires or billionaires should benefit, or even higher income people, so that's certainly something he would be considering," he said.
To date, Biden's actions have provided more than $17 billion in student debt relief to 725,000 borrowers.
Some $3.2 billion was written off to borrowers who had been defrauded by their private universities.
-- CNN's Kevin Liptak contributed to this report.
student loans
