President Joe Biden may drop student loan forgiveness from the upcoming White House budget proposal, despite progressive Democrats pressuring the administration to erase up to $50,000 in debt per borrower.
On May 21, 2021, The Washington Post reported that the upcoming budget proposal by White House officials would exclude key Biden campaign promises, including forgiving significant amounts of student debt. The administration will focus on passing what was already introduced. Regarding this, White House budget office spokesman Rob Friedlander said, “The President’s budget will focus on advancing the historic legislative agenda he’s already put forward for this year. The budget won’t propose other new initiatives but will put together the full picture of how these proposals would advance economic growth and shared prosperity while also putting our country on a sound fiscal course.”
Holding out on including one of Biden’s top campaign plans from his first budget proposal could upset the Democratic Party’s left-wing faction, which has repeatedly urged President Biden to cancel student debt using executive action. On May 25, Rep. Alexandria Ocasio-Cortez, D-N.Y. said, “We need to push him. I believe in full student loan debt cancellation, but we have to push him to at the bare minimum a floor of $50,000 that Sen. Warren and Sen. Schumer have also advanced.”
While Biden has already announced his decision to forgive $10,000 in student debt as a part of a broader coronavirus relief effort, nullifying it altogether may benefit wealthy Americans disproportionately. A recent paper by the University of Chicago’s Becker Friedman Institute for Economics shows that canceling all student debt would distribute just $29 billion to the bottom 20% of US households. However, the top 20% of earners in the US would receive $192 billion. Critics believe such action exceeds the authority Congress grants to the President.