The NPR Politics Podcast - Biden Promised To Cancel $10,000 In Student Debt For All Borrowers. He Hasn't.

Episode Date: February 9, 2022

Progressives point to a law that gives the education secretary the unilateral power to discharge federal student debt as a mechanism Biden can use to fulfill his promise to forgive $10 thousand in student loans for all borrowers. The White House has so far insisted the move would require an act of Congress.This episode: White House correspondent Scott Detrow, White House correspondent Asma Khalid, and education correspondent Cory Turner.Connect:Email the show at [e-mail] the NPR Politics Podcast Facebook Group.Subscribe to the NPR Politics Newsletter.Find and support your local public radio station.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hi there, this is Garrett and my daughter River. Say hi. Hello. Coming from Valparaiso in Northwest Indiana. Hi, Asma. Oh my gosh. Today is River's birthday, which, River, how old are you? Two. Good. This podcast was recorded at? It is 2-0-9 Eastern on Wednesday, February 9th.

Things may have changed by the time that you hear it, but tonight we're definitely going to have some cake. Okay. Enjoy the show. Bye. Bye-bye. Happy birthday. Asma, is that from your part of Indiana?

It is. So I said, oh my gosh, it was like Valpo is just right there. You know, we used to play him all the time in sports. I love that. Hey there. It's the NPR Politics Podcast. I'm Scott Detrow. I cover the White House. And I'm Asma Khalid. I also cover the White House. And more than 40 million Americans owe a total of about $1.6 trillion in federal student loan debt.

When he was running for president, Joe Biden made this promise. I'm going to make sure that everybody in this generation gets $10,000 knocked off of their student debt. NPR has been asking about this. Here's Franco Ordonez asking White House Press Secretary Jen Psaki about it back in December. You're working on a plan to help students pay. But what about President Biden's campaign to forgive or cancel $10,000 in student debt. Pardon me. What is the message to those people who feel that he's yet to follow through on that promise? Congress sends him a

bill. He's happy to sign it. They haven't sent him a bill on that yet. Corey Turner from NPR's education team has been reporting on this and asking a whole bunch of questions himself. And he is here. Hey, Corey. Hey, Scott. It's good to have you back on the podcast. And let's start with this question to you. In this context, there are tens of millions of Americans sort of in limbo in all of this, especially because repayments on loans, which have been frozen during the pandemic, are set to restart in May. Yeah, it's a really big moment. And we've never really been in a place like this.

You know, you got more than 40 million borrowers, as you said. They have fallen out of the habit of repaying their loans on a monthly basis. And I mean, as we just heard, there's just been a lot in the air over the last two years about the president's willingness to forgive some level of student debt. And a lot of borrowers who are feeling pretty stressed out right now are looking around and trying to figure out, is this going to happen? Where do things stand? I mean, Corey, one question I guess I have is just from a legal perspective, can the president do something? Because it sounds like a lot of folks on the progressive left

have been insisting this is something he ought to or could do unilaterally. Yeah, I think there is obviously a pretty strong debate out there among thoughtful people on both sides of this issue. There are folks, including Senator Elizabeth Warren, who argue pretty forcefully that there is already authority in what's called the Higher Education Act for the U.S. Secretary of Education to take care of these loans, to discharge loans if he sees fit. Biden has also said, though, at least in reference to, say, the $50,000 loan forgiveness proposal that's been out there for a while. He doesn't think he has the authority to do that. One thing that is clear, we heard it in the tape from Jen Psaki earlier,

there has been a shift of burden here from Biden and the White House, away from the idea of him just doing this unilaterally with executive authority, whether or not he thinks it's legal, whether or not he wants to do it, or he's comfortable doing it, it's clear he wants Congress to do it. But I think you all know even better than I do that that's not going to happen. Right. Asma, that gets to a question to you, because one of the themes of the past six months or so is just the way that Biden's agenda has really frozen into place in Congress. So let's talk about the politics of this move. What are some of the reasons why Biden might be dragging his feet on trying to take this action unilaterally? Well, I think for a long time, there was this assessment from Democrats in the White House

that in some ways, the president would be able to pass his so-called Build Back Better agenda, right? And why would he invest political capital in something like this that could potentially, let's say, alienate some of the more moderate members of Congress? I'm thinking of, say, West Virginia Senator Joe Manchin. Just to name somebody. I think that calculation, you know, really does need to be, and this is what you're hearing from activists, need to be reconsidered at this point in time, because it does not look like that build back better, you know, legislation has much of a political future at this moment in time. the kind of takeaways from the past couple of months is that maybe Biden and his team miscalculated when they thought they were taking office at this moment where America as a whole was maybe ready to go back into an era of big government, back into a New Deal, Great Society type, like

really large steps forward in terms of what the federal government does in the pandemic. So I'm wondering, given that, you know, you talked to so many advocates for this issue, what is their response to the pushback that you hear for canceling student debt? You know, the argument along the lines of, hey, people signed out loans, they knew what they were doing, they knew they were expensive, but this is an agreement they made, and it shouldn't be on the federal government to bail somebody out of a loan that they knowingly entered into. Yeah, I hear a few arguments back and forth there. One is that you're going to be hard pressed, Scott, to find any higher education expert who isn't willing to acknowledge that the price of college has gotten out of hand. The system has run amok. And that's really problematic, especially for low-income students. The idea that you could go to a really great public university not that long

ago and graduate with little to no debt, even those options now are overcrowded and they're more expensive. And so something does need to be done. And that's also part of this problem here, is like, I have heard from some folks inside the administration that like, how can we, how can we hit the reset button in such a big way, forgiving some or all student debt without at the same time doing something to sort of reimagine the system that created it. And Asma, last question to you on that point.

You know, I know you've been doing a lot of reporting on the economy this week, what it means for the midterms, what it means overall. You know, we're in this weird economy where there are so many things moving in a really good direction, but inflation is moving in a really bad direction and inflation seems to get the political attention more than many other things. Do you think maybe that's part of the reason why Biden is hesitant here, that that canceled student debt could really be a big income boost for a lot of people, which is a good thing on its own, but a bad thing when it comes to an already overheated economy?

I think that's a really valid point to keep in mind, Scott. And it's certainly a calculation that would be different if this president wasn't dealing with the situation where currently, I mean, we're going to get new inflation numbers out tomorrow. But as of now, inflation has climbed to 7%. That is higher than at any point, certainly in your or my lifetime. And so at this point in time, if you have suddenly a whole bunch of extra income that people have, it would potentially overheat the economy in ways that I think economists and certainly political analysts and certainly politicians such as the president do have to keep in mind. That all being said, you know, it is not as if the president

would necessarily wipe away all student debt. What the president had said during the campaign cycle and what he's been asked about more routinely now is just canceling $10,000 of student loan debt. I am not convinced that that amount would suddenly infuse a whopping amount of cash in. I mean, that is still collectively, I would argue, a fraction of what, you know, say the Build Back Better agenda would have been over the long run. All right, we're going to take a quick break. And when we come back, we're going to get into a little bit more detail of who exactly we're talking about across the country that would be affected by this possible policy. And we're back. Corey, you started to talk about the stats out there of who would be affected by this, who would be affected the most. Can we just take a step back and talk a little bit more about

how this debt is spread out right now and the types of people we're talking about when we're thinking about this policy? Yeah, I mean, I don't want to bury you all with numbers because, oh my goodness, you start talking about student loan debt and it gets real deep, real fast. I think it's important to note that when we're talking about some of the big chunky debt, a lot of that is graduate school debt. But then at the other end, about a third of the debt, and again, we're going back to that $1.6 trillion number, about a third of that debt is owed by folks who didn't complete, who have no degree to show for that debt. And so as a result, they don't have any improved ability to pay off that debt. And we also need to reckon with the fact that roughly

one in five federal student loan borrowers are right now in default. Like that's a big number. And it's an important consideration I've heard from a number of economists and also folks arguing for debt forgiveness from a social justice standpoint, that when you talk about the cost of debt forgiveness, you have to account for the fact that a lot of these debts are not now being repaid. And so you have to ask yourself, would forgiving the debts of folks in default, or at least erasing some of the debts of those in default, like, what impact would that have on their life choices, getting them back on track? Who knows? But yeah, it's a complicated story.

But you mentioned that a big chunk of it, though, is people with graduate degree debt. So what about this argument that this policy would disproportionately help people who are on their way to high earnings, people who are doctors or lawyers and probably have a few decades of earning a lot of money ahead of them? I think what you see when you cut through the debt is that, you know, the folks with those huge numbers, that's a relatively small group of people. And on the other end, you have an awful lot of borrowers with fairly small debt loads. But what's important to say, Scott, is that just because the debt load is small, say $5,000, if you don't have an undergraduate degree and, you know, maybe you attended one year at a for-profit, and you didn't get a certificate, that dead load could be prohibitively heavy for you.

And, you know, we see an awful lot of folks who are in default, with not a lot of money left to pay. They're just they're making ends meet barely. You know, that's the that's the real story here. There are an awful lot of people in that situation in the student debt portfolio. So Asma, last question, broadening this out to the political situation Biden finds himself in. This does kind of seem to me like an area where progressives are frustrated, very frustrated, skeptical of the administration at this point. But, you know, the more he moves toward trying to make them happy, one, it seems like, first of all, he's just not going to do as much policy as would fully make that camp happy for a lot of different reasons. And the second is, he's also very weak with independents and moderate voters right now. And the more he moves progressive, it seems to

hurt his numbers with that other key core of voters. So this seems like yet another area where politically in the short term, at least, Biden does not have a lot of obvious great choices ahead of him when he's trying to help his party from the midterms in a few months. You know, that's true, Scott. But I would say that when I look at what actions the president could or could not take in the next few months ahead of the midterms, to me, this idea of student loan forgiveness is perhaps not as risky as it might look. Some of the polling I've seen suggests that it is marginally popular amongst the public, right? So it's not an unpopular idea, you could say. And the other thing is that,

you know, overall, when you look at things like the economy, everybody looks at everything nowadays through the lens of partisan polarization. So right now, Republicans' views on the economy are way more negative than you might objectively think they ought to be, right? And so there's really not a chance that the president's going to win over anyone. What he needs to do is make sure his base of Democratic voters actually show up at the polls in November. And I would argue that potentially one way of making sure that a subset of Democratic voters are energized is by giving them something, delivering something. It seems really hard he'll be able to get anything passed legislatively in the next few months. He could potentially maybe do something through executive action. All right, Corey Turner, thanks for joining us on the podcast today.

Thanks to both of you. I'm Scott Detrow. I cover the White House. And I'm Asma Khalid. I also cover the White House. We'll be back in your feeds tomorrow. Thank you for listening to the NPR Politics Podcast.