Biden Should Cancel Student Debt for All Borrowers: Attorneys General

• Eight state attorneys general urged Biden to cancel federal student debt for every borrower.
• They wrote that in their roles, they have seen the consequences falling behind on payments can have.
• Biden said he will make a decision on debt relief in coming weeks, but it will likely be limited by income.

State attorneys general have joined the fight for broad student-loan forgiveness.

On Wednesday, attorneys general from New York, Hawaii, Illinois, Michigan, Minnesota, New Mexico, Puerto Rico, and Washington wrote a letter to President Joe Biden urging him to cancel federal student debt “for each and every borrower.”

They wrote that, in their roles, they have seen the burden student debt can have for borrowers who fall behind on payments. This includes wage garnishment and seizure of federal benefits, which Biden can ensure permanent relief for by forgiving that debt.

“Restarting federal student loan payments, rather than permanently forgiving them, will only make matters worse,” they wrote. “While pushing out repayment restarts and attempting to tackle past forbearance abuses are helpful, they are not enough.

“Now is not the time for half measures, extensions or patchwork solutions,” they added. “Now is the time for decisive action.”

—NY AG James (@NewYorkStateAG) May 4, 2022

State attorneys general have previously fought for protections for student-loan borrowers. In January, 39 of them reached a $1.85 billion settlement with major student-loan company Navient over accusations the company misled borrowers and steered them into deeper debt, which Navient denied. And now, with Biden saying he will make a decision on student-loan relief in the coming weeks — before student-loan payments are set to resume after August 31 — they are joining Democrats in Congress pushing for broad relief for every federal borrower.

Based on recent reports, it looks like not every borrower will access the relief Biden might implement. White House Press Secretary Jen Psaki told reporters on Tuesday that Biden is looking at helping student-loan borrowers making under $125,000 a year, and while that would help the majority of borrowers, lawmakers have pushed back on capping the relief.

“I don’t believe in a cutoff, especially for so many of the front-line workers who are drowning in debt and would likely be excluded from relief,” New York Rep. Alexandria Ocasio-Cortez told The Washington Post.

And while Biden has not yet commented on an amount for forgiveness, he said he is not considering $50,000 in relief, which progressives were pushing for. Recently released data from Massachusetts Sen. Elizabeth Warren’s office found that while every amount of forgiveness will make a different, the more the better — while $10,000 in relief would wipe out debt loads for a third of borrowers, and 2 million Black borrowers, $50,000 in forgiveness would zero out 30 million borrowers’ balances.

“Cancelation of federal student loan debts will reduce stress and mental fatigue, free families to invest in new homes and new lives, and provide countless opportunities,” the attorneys-general wrote. “And because student loan debt exacerbates the racial wealth gap, widespread cancelation of student loan debt is not merely a matter of economic justice, but of racial justice as well.”