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As Biden taps Elizabeth Warren ally to oversee student loans, debt forgiveness debate looms large | national

(college correction) – The Biden administration has chosen a close ally of U.S. Sen. Elizabeth Warren, D-Mass., to oversee the country’s vast federal student loan program.

Last Monday, Rich Cordray, director of the Office of Consumer Financial Protection during the Obama administration, was announced as the new head of the Department of Education‘s Office of Federal Student Assistance, which oversees more than 1, $7 trillion in US student loans.

In a statement after his appointment, Cordray said he seeks to “create more pathways for students to graduate and move forward, without being burdened with insurmountable debt.”

The move is seen as a victory for hardline progressives, who have pressured Biden to “cancel” student loans, which they say places an undue burden on young Americans and exacerbates economic inequality.

Among these is Warren, who during his unsuccessful presidential campaign promised to use his executive power “to cancel up to $50,000 in debt for 95% of student borrowers (about 42 million people)” .

In a statement released following Cordray’s announcement, Warren said the new head of loans will “apply his fearlessness and expertise to protect student borrowers” and bring “much-needed accountability to the federal student loans program.” .

In 2017, Warren created an official website dedicated to chronicling the activities of then Education Secretary Betsy DeVos, consisting mostly of press releases from Warren cajoling the former secretary.

But in February, Biden himself questioned whether he had the legal ability to forgive large amounts of student loan debt.

“I am ready to cancel a debt of $10,000, but not [$50,000]Biden said during a CNN town hall in February. “Because I don’t think I have the authority to do so by signing the pen.”

According to data from the Department of Education, if Biden erased $10,000 in debt, more than a third of borrowers would have their loans completely forgiven.

Yet on April 1, Biden asked Education Secretary Miguel Cardona to draft a memo explaining whether he had the authority to cancel $50,000 in executive order loans.

Shortly before Biden was sworn in, the Department of Education’s general counsel’s office sent DeVos a memorandum stating that the department “has no legal authority to void, compromise, discharge or forgive, on a lump sum or mass basis, principal student loan balances, and/or materially alter the amounts of repayment or the terms thereof.”

If Biden cannot single-handedly cancel student debt, it would take an act of Congress to do so, an interim proposal given that the US Senate is essentially tied, with Democratic Vice President Kamala Harris as the deciding vote. But that means Democrats can’t lose a single member in a vote, if Republicans stick together.

“Universal student loan forgiveness primarily benefits the wealthiest Americans with advanced degrees and would set a bad precedent,” Sen. Marsha Blackburn, R-Tenn., told The College Fix. “The federal government should not subsidize the debt further.”

When asked to comment, a spokesperson for Sen. John Cornyn, R-Tx., referred The College Fix to an earlier statement in which he said people are responsible for the debts they choose to incur. and that he would be more willing to support the measures. that make tuition more affordable.

“I just think it’s kind of a dangerous way to go down,” Cornyn said in an interview earlier this year. “Basically, saying that people don’t have to follow the agreements they made with me is a bad, very bad idea.”

Beth Akers, a fellow at the American Enterprise Institute who specializes in higher education, told The College Fix that the legal argument over the president’s ability to unilaterally cancel the debt is still unclear, but what is clear is that it would cost a lot of money.

“Some have argued that this money has already been spent and will not affect our federal budget,” Akers said in an email to The Fix. “This is fundamentally wrong. It wouldn’t take money out of the bank, but it would keep income out. These are revenues that we will have to replace with new taxes or by reducing other spending programs.

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