Photo: Chip Somodevilla/Getty
It was an “exciting day” at the White House Wednesday after PresidentJoe Bidenrevealed his long-awaitedstudent loan forgiveness plan, fulfilling a campaign promise to provide relief to Americans who are in debt because of the soaring costs of higher education.
“We’re seeing great enthusiasm from folks across the spectrum for the president’s announcement,” White House Deputy Communications Director Kate Berner said in an interview with PEOPLE following the president’s remarks.
Amid the enthusiasm, there is also skepticism — even some opposition — to the much-anticipated news that relief has arrived for people hurting because of student loans. Under Biden’s plan, non-Pell Grant recipients will have up to $10,000 in student loan debt canceled if they make less than $125,000 per year. Pell Grant recipients are eligible for up to $20,000 in cancellation if they meet the same income requirement. Married couples must make less than $250,000 per year combined to qualify for loan forgiveness.
“No one who makes over $125,000 will have a penny of debt relief,” Berner said Wednesday. “This is targeted debt relief.”
Of the 43 million borrowers who are eligible for the plan, the White House believes “20 million of them will have their debt totally wiped away and about two-thirds of them will have half or more of their debt wiped out,” Berner explained.
What about individuals who don’t qualify because they make more than $125,000, which Berner said puts them in the top 5% of incomes?
“If you’re working in a job that’s putting you in that top 5% that’s great for you and for your family,” Berner said. “But the president believes that we should be targeting this relief to middle class and working families who need this relief the most and that makes this program fair, that makes this responsible to the taxpayer.”
“Policymaking and getting it right, there’s always a tension there,” she added. “It’s important to the president that we do something that was fair and targeted and reasonable to the taxpayer.”
To those who say the $10,000 to $20,000 in relief is not enough, Berner pointed to the Department of Education’s proposed changes with a new income-driven repayment plan that Biden called “simple and fair” in his public remarks on Wednesday.
The plan “caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income — half of the rate that borrowers must pay now under most existing plans,“according to a descriptionthe White House published Wednesday.
“That’s a big deal for families across the country who still have some loan debt,” Berner said.
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Senate Minority LeaderMitch McConnellreferred to the plan as “President Biden’s student loan socialism” in astatement Wednesday, calling it “astonishingly unfair” and “a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt.”
“He sees our commitment to military families and to military veterans as one of our most sacred obligations as a nation. That’s why he’s proud to assign into law and aggressively push forthe PACT Act, which is the biggest expansion in veterans' benefits that he signed just a few weeks ago,” she said. “His commitment to military families, members of the military and veterans is clear and ironclad.”
“Sen. McConnell has no problem giving tax giveaways to the super rich and corporations,” Berner argued. “The president believes that when we act, we should be acting to give middle class families a helping hand and to reward work and not wealth.”
In announcing debt relief, Biden also extended thestudent loan payment pauseone final time to last through the end of the year, indicating that borrowers should expect to resume payments at the start of the new year under the new policies.
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source: people.com
