Is the student loans forgiveness falling short of Biden’s promises?

The huge step, nonetheless, represents a compromise solution to a complicated problem, as it falls short of an earlier Biden proposal.

On Wednesday, President Joe Biden made a ground-breaking announcement with regards to one of the key campaign promises of the 2020 election cycle; the Democrat leader expressed his willingness to use his executive authority to unilaterally forgive up to $20,000 of student loan to those earning less than $125,000 per year. The huge step, nonetheless, represents a compromise solution to a complicated problem, as it falls short of an earlier Biden proposal.

On Wednesday 24th August, President Biden broke a long-held precedent, in a bold move towards a partial fulfilment of one of the most progressive promises he made during the 2020 Presidential campaign. The announcement comes in the midst of the worst inflation hike in nearly four decades, as economists and the wider public worry that upwards of $300 billion could be freed to ramp up pressure further on housing and car prices. An earlier decision would not only have avoided any potential contribution to inflation, but actually helped in recovery from the pandemic. Furthermore, while the White House claims that 90 % of the relief would go to those earning below $75,000 per annum, other estimates find that as much as 73 % could go to the top 60 % of income earners. It is also worth noting that the current plan allows for forgiveness of almost double ($20,000) the amount promised earlier for the most hard-pressed borrowers. It also extends a freeze on debt payments for the fourth time since the pandemic began. It is yet unclear whether more relief would follow in the remaining two years of the Biden Presidency.

During the said campaign, the former vice-President and long-term Senator from Delaware repeatedly promised to sign off up to $10,000 in student loans for all the 43 million federal borrowers. However, he make it repeatedly clear that the process would have to follow proper congressional channels, and often refused to given specific numbers. He also explicitly rejected the more radical plans to forgive upwards of $50,000 per borrower multiple times both before and after his election.

Nonetheless, many pointed out the hypocrisy behind this obvious façade of providing some relief to everyone earning up to $125,000 per year, or $250,000 in case of married families. In a Medium post dating from the early campaign days, Mr. Biden promised to forgive “all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities” for the same segment of the population, if the plan in question was implemented. The context still maintains the stress on $10,000 in forgiveness in all circumstances, but the departure from earlier ideals is clear. It is for this reason that PolitiFact rates the current debt forgiveness regime as a ‘compromise’, with the full campaign promise yet to realize.

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