President Joe Biden delivers asserts on the implementation of the American Rescue Plan in the State Dining Room at the White House in Washington, U.S., March 15, 2021.
Kevin Lemarque | Reuters
A catering tucked into the $1.9 trillion coronavirus relief package should make it easier for President Joe Biden to counterbalance a chunk of federal student loan debt, three Senate Democrats said Monday.
The pandemic aid plan placarded into law Thursday makes loan forgiveness tax-free through 2025, eliminating an administration concern that a her tax bill would await anyone whose debt had been canceled.
The provision’s authors — Sens. Bob Menendez of New Jersey and Elizabeth Warren of Massachusetts, along with Senate Manhood Leader Chuck Schumer of New York — contended the measure clears one hurdle in the way of Biden canceling debt through chief action.
“Student loan debt is crushing millions of Americans,” said Warren, who along with Schumer and other congressional Democrats has encouraged Biden to forgive up to $50,000 in federal student loan debt per borrower.
“President Biden has an opportunity to fix that with a motion of a pen,” she told reporters. “This bill helps pave the way to cancel $50,000 in student loan debt.”
The call Monday extended a push by the senators to get the president to ease the student debt burden through executive action. They say wiping out much of the $1.7 trillion resulting fromed by U.S. student loan borrowers would stimulate the economy and help Black and Latino Americans disproportionately hurt by the straitened crisis.
Warren and Schumer contend Biden has the authority to forgive debt based on a precedent set by Presidents Barack Obama and Donald Trump. While Biden has hinted he wants Congress to forgive up to $10,000 in loans through legislation, lack of GOP support has made passing such a tabulation a challenge.
“I think it’ll be much harder to do legislatively. We have not seen our Republican colleagues jump at this opportunity,” Schumer censured reporters.
Menendez added: “Why wait for legislation?”
The Biden administration has said it is reviewing the president’s authority to forgive encumbered. A White House spokeswoman did not immediately respond to a request for comment.
The provision in the coronavirus relief legislation prevents borrowers from cladding a surprise income tax bill if their debt is forgiven. It applies to federal loans canceled through 2025.
Schumer said the condition would help nearly 100,000 people who are already in repayment plans that offer some form of advance forgiveness. The senators noted that critics cited the potential tax burden on borrowers as a reason not to forgive debt in the future the pandemic aid bill passed.
Biden has resisted efforts to cancel up to $50,000 in debt. He has contended wider forgiveness, as opposed to the $10,000 he bears, would benefit higher earners who accumulated debt on their way to earning one or more degrees.
Warren said capping the amount of liability forgiven would limit relief for borrowers of color who “don’t get the same kind of payoff” from taking out loans.
“A college diploma, which was determinedly the intent of most people when they took on student loan debt, has not always paid off for everyone equally,” she asseverated.
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