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President Biden had doubts. In private conversations with White House staff and congressional allies this spring, he said he worried that voters who had never attended college might resent a move to write off large amounts of debt student, according to four Democratic officials who spoke on condition of anonymity to reflect private conversations. Biden also said the federal government should not bail out Ivy League graduates and that their children should not qualify for aid, two of the officials said.
“He was nervous about how he would play with working-class people,” said one senior Democrat, recalling the president’s comments at a meeting this spring.
But a relentless campaign was pressuring Biden to take dramatic action: There were private appeals aboard Air Force One, the courtship of First Lady Jill Biden, months of political and economic arguments by senior the White House and warnings from black lawmakers about the dangers of doing too little. In the end, Biden arrived. Not only did it eliminate up to $20,000 of debt for most borrowers, an amount many activists thought unlikely. He also defended the notion passionately from the bully pulpit on Wednesday.
After six repayment extensions, pressure from Congress and activists, the White House is acting on federal student loans. (Video: Michael Cadenhead/The Washington Post)
The result is one of the most significant changes to American higher education policy in decades, and a new cornerstone of the president’s economic legacy. Biden’s decision will dramatically change the financial circumstances of tens of millions of Americans, completely wiping out the student loans of about 20 million people. His political savvy will be tested immediately, and Republicans will use it as a key part of their 2022 midterm campaign message.
Who qualifies for Biden’s plan to write off $10,000 in student debt?
Despite campaigning on student debt forgiveness, Biden struggled for months with the right path. The president overcame unease with a policy criticized for enriching the wealthiest Americans, in part because of data presented by White House staff showing the beneficiaries would be in the working and middle classes. The proposal was not only controversial with influential Democratic economists such as former Treasury Secretary Larry Summers. It was also initially met with skepticism by Susan Rice, director of the White House Domestic Policy Council, although she later came to support it, according to three people familiar with the internal discussions.
In a statement, White House Chief of Staff Ron Klain said Rice and Biden always supported taking major action on student debt. But the scope of that policy continued to change for most of last year. Biden aides envisioned more restrictive policies that would exclude graduate students, extend the pardon only to those who had attended public universities and limit the pardon to those who earn less than six figures. For weeks, the main proposal would have canceled at most $10,000 per student.
Ultimately, however, Biden dismissed those potential restrictions as too modest for the scale of America’s debt burden. He opted for something significantly more expansive, backing a private White House memo prepared for him in July and breaking with some allies in his centrist Senate race who quickly distanced themselves from politics. The choice partly reflects Biden’s role as a coalition politician: he became convinced that aggressive student debt relief would give Democrats a better chance of winning Congress in the fall with a much-needed boost from young voters and people of color. White House aides also gathered evidence privately to show that the more targeted plan would do little to erase racial disparities.
This story of how Biden embraced debt cancellation is based on more than two dozen interviews with White House officials, congressional lawmakers, Democratic pollsters, outside economic advisers and student debt activists, many of whom speak on condition of anonymity to describe the private. conversations
“This was the issue that divided the economic establishment of the Democratic Party, in and out of government,” said Michael Pierce, who served as deputy assistant director of the Consumer Financial Protection Bureau during the administration. ‘Obama and now it’s on Student Borrower. Protection Center, which has advocated for debt cancellation. “But the president decided to grow up.”
Calculate how much of your student loan debt can be forgiven
Warren’s allies are reshaping the Democratic Party
Biden was a late convert to the cause of student debt relief. The idea first emerged from Occupy Wall Street and the fringe left after the financial crisis of 2008. For years, only a handful of lawmakers supported the concept. Democrats broadly agreed on the need to control college tuition, and the Obama administration supported several proposals, including expanding Pell grants, a form of federal financial aid used primarily by low-income students , intended to reduce the price of higher education. But retroactive forgiveness of existing student debt was anathema in mainstream Democratic policy circles, where party economists saw it as a radical step with little precedent.
That began to change because of the work of a group of activists, many of whom were deeply in debt, backed by Sen. Elizabeth Warren (D-Mass.). Supporters of a “debt jubilee” argued that tuition reform would do little for graduates already saddled with mountains of debt and plagued by a weak job market for years after the recession. Seeking to tap into that frustration, Warren and Sen. Bernie Sanders (I-Vt.) floated aggressive student debt cancellation plans in their 2020 presidential campaigns.
Aiming to unify the Democratic Party after the 2020 primaries, Biden endorsed canceling at least $10,000 in debt per borrower after winning the nomination. When she took office, Warren allies landed key administration posts on economic and education policy: Julie Morgan, a Warren aide who developed the legal case for debt relief, became deputy assistant secretary of the Department of Education. Richard Cordray, a former adviser to Warren at the Consumer Financial Protection Bureau, was named chief operating officer of the Office of Federal Student Aid. Bharat Ramamurti, Warren’s 2020 economic policy chief, joined the White House National Economic Council as deputy director.
Ramamurti, in particular, would later prove crucial in persuading Biden to push for debt cancellation amid skepticism from other parts of the administration, as part of a team led by Rice and other senior White House officials Carmel Martin and Brian Deese.
“Working with the Biden transition to get key people in the White House and in places like the Department of Education set the stage for a lot of allies to be in the room as this was being discussed,” said Adam Green, an ally from Warren.
Who Has Student Loan Debt in America?
But these forces did not remain unopposed. The Democrats’ thin majority in the Senate made it impossible to pass $10,000 in debt forgiveness through Congress. For more than a year, high inflation has held back the president’s approval, with critics arguing that hundreds of billions in debt relief could lead recipients to spend more money, driving up prices even more. Negotiations with Sen. Joe Manchin III (DW.Va.) over the party’s domestic policy agenda proved another stumbling block, with senior Democrats wary all summer of upsetting the lawmaker. Democratic pollsters presented the administration with evidence from focus groups suggesting that voters who had paid off their loans would be upset by significant loan forgiveness.
Publicly, Biden himself stood by the $10,000 line. “I’m willing to pay off $10,000 in debt, but not $50,” he said, then added, “My daughter went to Tulane University and then got a master’s degree from Penn. She graduated with a $103,000 debt … I don’t think anyone should have to pay for that.”
The concerns were not just political. Career staff in the Department for Education felt that they were being asked to take on too much at once and would struggle to achieve it all. Centrist Democrats worried the plan would be too generous to Americans who don’t need help. As rumors of possible debt cancellation swirled, Sen. Michael F. Bennet (D-Colo.) argued on the Senate floor that relief should go more directly to the lowest earners. Bennet later told senior White House officials that the loan relief might do too much to help wealthy Americans, a person familiar with the matter said. Bennet publicly issued similar criticisms Wednesday after the White House released his plan.
Biden also faced pushback from prominent Democratic economists, particularly Summers, who had championed the president’s “Build Back Better” agenda after initially criticizing the White House’s pandemic relief plan last year for its 1.9 trillions of dollars. price tag Biden has often stressed that the Inflation Reduction Act would reduce the federal deficit, but projections by budget analysts showed that student debt relief would wipe out some of those tax gains.
“During BBB, there were a lot of policies that people on the center left knew were irresponsible, but they didn’t want to criticize because they wanted to be team players,” said Ben Ritz, director of the Progressive Policy Institute’s Center for Funding America’s Future. , alluding to complaints about expensive and controversial proposals. Now, he said, opponents are unwilling to keep quiet about their objections to Biden’s student loan plans. “Centrist Democrats are largely aligned that this was a mistake.”
Those warnings appeared to limit the ambition of the White House’s loan forgiveness plan. But that was before a crucial meeting with Black…