US president announces renewed effort to provide ‘life changing’ debt relief, a key issue for young voters.
The proposal, which Biden unveiled on Monday during a trip to the state of Wisconsin, includes cancelling up to $20,000 of accrued and capitalised interest for borrowers, regardless of income.
The Biden administration estimates this step would eliminate the entirety of that interest for 23 million borrowers. And when combined with previously announced plans, the new measures “would provide debt relief to over 30 million borrowers”, the White House said in a factsheet.
“This relief can be life-changing,” Biden said during a speech in Madison, the capital of Wisconsin, unveiling his plans.
“Folks, I will never stop delivering student loan relief for hard-working Americans… It’s for the good of our economy.”
He added that if he is re-elected in November’s presidential election, he would push hard to make community college free.
Progressives and younger Americans have long urged Biden to address student loan debt. Biden is expected to face a tight race for re-election, and appealing to those demographics is likely to be key.
However, Biden’s ability to galvanise those groups remains in question. Many progressives, for example, have voiced anger over Biden’s unwavering support for Israel during its war in Gaza, which has killed more than 33,000 Palestinians since early October.
Biden’s announcement on Monday comes less than a week after nearly 50,000 Democratic primary voters in Wisconsin voted “uninstructed” in protest of his policies on Israel and Gaza.
The president continues to face calls to use US aid to Israel as leverage to broker an immediate ceasefire in the besieged Palestinian enclave.
On the student loan issue, the US Supreme Court last year cancelled Biden’s attempt to scrap billions of dollars in debt.
Since then, the White House has pursued debt relief through other targeted initiatives, including for public service workers and low-income borrowers.
Biden administration officials say they have cancelled $144bn in student loans for almost 4 million Americans.
But as of June 2023, approximately 43.4 million student loan recipients had a total of $1.63 trillion in outstanding loans, according to the Federal Student Aid website.
White House spokesperson Karine Jean-Pierre told reporters in a call on Monday that, if the administration’s latest proposals are finalised following a public comment period, they would take effect “as early as this fall“.
Monday’s announcement drew criticism from some Republicans, however. Biden is expected to face his Republican predecessor Donald Trump in the upcoming vote.
US Senator Bill Cassidy, the top Republican on the Senate education panel, said such “loan schemes” simply transfer the cost of the debt onto others.
“This is an unfair ploy to buy votes before an election and does absolutely nothing to address the high cost of education that puts young people right back into debt,” Cassidy said in a statement.