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--:-- Sean Rameswaram: President Joe Biden tried to push the biggest student debt forgiveness plan in United States history through using his executive power alone. And he failed. End of story, right?
--:-- Sean Rameswaram: I think it's a lot more complicated than that. Was he able to pass this massive debt forgiveness and help 40 million people? No. Or at least not yet.
--:-- Sean Rameswaram: His signature economic policy, or at least one of his signature economic policies, was struck down by the Supreme Court. But he's still fighting for this, and there is still another path to getting this form of student relief to the people who need it.
--:-- Sean Rameswaram: Danielle Douglas-Gabriel covers higher education for The Washington Post, and on Today Explained, just as borrowers prepare to start paying back student loans again after a three-plus-year hiatus. She's going to help us understand the president's journey on this issue, which appears to be far from over.
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--:-- Sean Rameswaram: Estar escuchando a Hoy Explicado. Today, Explained.
--:-- Sean Rameswaram: The president of the United States can't stop, won't stop trying to alleviate the financial burden of millions of Americans. And we asked Danielle Douglas Gabriel what that tells us about his presidency.
--:-- Sean Rameswaram: This is the president who's interested in compromise and is willing to listen to his constituency. I think we clearly saw that and the fact that for the first year of his presidency, he was being pushed by Chuck Schumer.
--:-- Sean Rameswaram: Tens of millions of Americans, student loan payments are a huge burden upon them. Or Elizabeth Warren. Even if you don't have student loan debt, you will be helped by seeing student loan debt cancel.
--:-- Sean Rameswaram: Ayanna Pressley. College degrees are increasingly essential for economic survival, but their sticker price is far too out of reach for most families.
--:-- Sean Rameswaram: On this issue, they did not let up. They were unrelenting. He was reluctant at times, but eventually when he received the information about how dynamic student loan debt is and who's suffering, the fact that people who didn't actually graduate and have a lot of debt make up about 40 percent of the population with student loans.
--:-- Sean Rameswaram: All of that information and all of the efforts on the part of the liberal wing of the Democratic Party and student activists, I think, really got to the president. And that's what we saw with the policy of last year.
--:-- Sean Rameswaram: Using the authority Congress granted the Department of Education, we will forgive $10,000 in outstanding federal student loans. In addition, students who come from low-income families, which allowed them to qualify to receive a Pell Grant, will have their debt reduced $20,000.
--:-- Sean Rameswaram: Both of these targeted actions are for families who need it the most. Working and middle-class people hit especially hard during the pandemic, making under $125,000 a year.
--:-- Sean Rameswaram: Where does President Biden's student loan forgiveness saga begin? I believe it begins before he's even in office, right?
--:-- Danielle Douglas-Gabriel: Definitely. This was something that he had promised on the campaign trail to forgive some portion of student loan debt.
--:-- Danielle Douglas-Gabriel: And this wasn't a policy that he was really campaigning on early on. I think as it was clear he was going to cinch the Democratic nomination, he really adopted a policy that was being championed by people like Kamala Harris, people like Elizabeth Warren, who continued to fight for it once Biden actually was elected president.
--:-- Danielle Douglas-Gabriel: So he seemed to be reluctant to come into this stance. But once he got there, he seemed ready to fight. And I think that's what we're seeing now, a president who is still willing to fight for this policy.
--:-- Sean Rameswaram: My campaign for president, I made a commitment. That would provide student debt relief. And I'm honoring that commitment today.
--:-- Sean Rameswaram: So once he's in office, what does he do? He doesn't roll out some student loan forgiveness on day one. No.
--:-- Sean Rameswaram: So the first year in office, year and a half almost, it was a will he, won't he? Does he have the authority? Will he do it?
--:-- Sean Rameswaram: And it was like a constant back and forth as to whether we were going to see this big sweeping policy. But while that was happening, there were all these smaller policies getting at student loan relief that were coming out.
--:-- Sean Rameswaram: There was the waiver for the rules around public service loan forgiveness, a program that helps teachers and social workers get debt relief after 10 years of service.
--:-- Sean Rameswaram: There was an announcement that he was going to give people credit towards student loan forgiveness if they'd been in repayment for a long time through this income-driven repayment adjustment.
--:-- Sean Rameswaram: There was the Department of Education granting group debt relief for folks who had been defrauded by their colleges.
--:-- Sean Rameswaram: So there were all these kind of efforts to chip at the larger problem of student debt in America. And I think also trying to clean up what has been decades of administrative problems with the way the system runs.
--:-- Sean Rameswaram: But none of that was getting the amount of attention as this big looming possible policy to forgive loans for some 40 million people
--:-- Danielle Douglas-Gabriel: So how does he come to a decision on what exactly to do? I think a lot of that came from the Black Congressional Caucus from the Hispanic Congressional Caucus, constantly pushing him on this issue.
--:-- Danielle Douglas-Gabriel: So the question today is, does the president of the United States have the power, the legal right to cancel student debt? To that we say? Yes. Yes. Hell yeah.
--:-- Danielle Douglas-Gabriel: Also bringing the kind of data that made the issue salient to the president, right? Giving data like showing that the student loan burden is really being shouldered by students of color, by minority students because of the way racial wealth inequality works and labor market discrimination and all of those things.
--:-- Danielle Douglas-Gabriel: And then getting data that shows that 40% of people who owe loans never actually got a college degree because they went to places that didn't really help them or they had to drop out for myriad reasons.
--:-- Danielle Douglas-Gabriel: And once I get the sense that the president was able to wrap his head around the dynamics and the nuance of student debt, it became easier to sell the policy.
--:-- Sean Rameswaram: And when does he roll out that plan, and how do people respond? Last summer is the rollout. And some people, particularly people who, you know, owe a lot more money than $20,000 were like, this is a drop in the bucket.
--:-- Sean Rameswaram: This won't even cover my interest on my debt. Thanks, but couldn't you do better? Coupled with my loans from undergrad, I plan to be over $100,000 in debt when I graduate. 10K off, it's not changing anything dramatically about my life situation, but I'll take it.
--:-- Sean Rameswaram: I'll certainly take what I can get. Then there were other people who were like, this is awesome. I can't believe that we got here. The idea that student debt forgiveness is an actual viable policy after so many years of just being on an activist wish list.
--:-- Sean Rameswaram: I mean, I am just overwhelmed that 20 million people aren't going to have student loan debt anymore. And then, of course, you had many folks like this is a waste of money and this is an overreach of presidential authority.
--:-- Sean Rameswaram: I don't think it's a good idea because we're already in a lot of debt in federal spending. And certainly that's where we saw the crop of lawsuits spring out of that ultimately defeated the plan.
--:-- Sean Rameswaram: How long did it take before lawsuits were filed there? Oh, weeks.
--:-- Sean Rameswaram: In his reckless, unconstitutional, immoral student loan transfer scheme. And I assure you, there were, you know, conservative groups that were trying to figure out how to find a client who had standing, meaning that they could prove that they were harmed by the policy.
--:-- Sean Rameswaram: And a lot of the cases, it was like throwing spaghetti at the wall to see how it would stick. Many got dismissed within a couple of months. Some of them made it through. The two that ultimately made it to the Supreme Court were perhaps the strongest, but still had holes.
--:-- Sean Rameswaram: A lot of people still questioned whether the one that did make it through the court and ultimately defeated the plan was as strong as the court and the justices perceived it to be.
--:-- Sean Rameswaram: And mind you, the program is shut down, God, by November, I think it was. By then, 26 million people had applied for student loan relief.
--:-- Sean Rameswaram: So more than half the people who would have been eligible. And the Department of Education had actually approved 16 million of those applications.
--:-- Sean Rameswaram: So there were 16 million people ready to get loan forgiveness. 16 million people. 16 million people had already been approved.
--:-- Sean Rameswaram: The money was literally about to go out the door. And then Republican elected officials and special interests stepped in. They said, no, no.
--:-- Sean Rameswaram: So at the Supreme Court, during oral arguments in February, it seemed pretty clear that the justices were going to rule against the program.
--:-- Sean Rameswaram: What I think they argue that is missing is cost to other persons in terms of fairness, for example. People who've paid their loans, people who have planned their lives around not seeking loans, and people who are not eligible for loans in the first place.
--:-- Sean Rameswaram: And that a half a trillion dollars is being diverted to one group of favored persons over others. But people are holding that hope.
--:-- Sean Rameswaram: And then, you know, we get the decision at the end of June. And what exactly does that mean for borrowers, for the millions and millions of Americans who are already promised debt relief?
--:-- Sean Rameswaram: They're not going to get it, at least not through this strategy. Borrowers, of course, are devastated.
--:-- Sean Rameswaram: Within hours of the Supreme Court's decision, because the White House had been planning, figuring out what else it could do in the event that the program got struck down, they come up with another strategy to do this.
--:-- Sean Rameswaram: A different authority, and to see if he's able to push through his debt relief plan under that authority through negotiated rulemaking.
--:-- Sean Rameswaram: I'm announcing today a new path consistent with today's ruling to provide student debt relief to as many borrowers as possible, as quickly as possible.
--:-- Sean Rameswaram: We will ground this new approach in a different law than my original plan, the so-called Higher Education Act.
--:-- Sean Rameswaram: And then is there still potential that this new plan could get challenged all the way to the Supreme Court where we know there's a tendency to kick this thing back down?
--:-- Sean Rameswaram: Oh, definitely. I have been in talks and reporting out stories about conservative groups that are, again, waiting in the wings, waiting to see what the final plan and final rule looks like and to see if there's any entry point that could be challenged in court.
--:-- Sean Rameswaram: You've seen it happen with lots of other Biden policies during his tenure. So it's very likely it will happen with this new rule once it comes down.
--:-- Sean Rameswaram: Where does this leave borrowers? I mean, you were promised a plan by the president of the United States. It went to the Supreme Court. They kicked it back.
--:-- Sean Rameswaram: The president immediately says he going to try something else. That going to take a while to figure out.
--:-- Sean Rameswaram: Are a lot of people going to be paying as they supposed to come September? Are they going to be defaulting on these loans?
--:-- Sean Rameswaram: Are people confused as hell? I've spoken to a few confused as hell, folks. But I've also spoken to a good number of people who are kind of formulating a plan.
--:-- Sean Rameswaram: Look, you have a year in which the Department of Education will not mark your late payments as delinquent and send you to a collection agency and ruin your credit.
--:-- Sean Rameswaram: So that 12-month on-ramp period, for folks who have a difficult time, it's built in to try to make sure it doesn't destroy their financial lives as they ease back into repayment after three years.
--:-- Sean Rameswaram: But keep in mind, interest is still going to be accruing. Interest starts accruing on your loans September, and October is when payments are due.
--:-- Sean Rameswaram: I think right now the Biden administration is really promoting this new income-driven repayment plan known as SAVE as the answer for a lot of borrowers, especially low-income borrowers, who really can't afford their payments.
--:-- Sean Rameswaram: Today I'm proud to announce a new program called the SAVE plan. It's the most affordable student loan plan ever.
--:-- Sean Rameswaram: And certainly it is the most generous repayment plan out there, but it doesn't take full effect till next year.
--:-- Sean Rameswaram: So it's confusing for people who are trying to figure out what should I do now.
--:-- Sean Rameswaram: But what's kind of nice and I appreciate is that there are a lot of interactive tools on the Department of Education's website that lets you plug in your financial situation and figure out which plan is best for you.
--:-- Sean Rameswaram: The president clearly said, start paying your loans. And so if the man who created the program that's trying to wipe away some of that debt is telling you to start paying your loans, I would say, listen to him.
--:-- Sean Rameswaram: I, you know, look, interest is going to start accruing September. Right. And payments aren't due to October.
--:-- Sean Rameswaram: But why wait and see your debt continue to climb? Paying down your loans at this stage would not be a bad thing.
--:-- Sean Rameswaram: I just don't think waiting for a year as your loans kind of become delinquent is a great financial strategy for the majority of student loan borrowers.
--:-- Sean Rameswaram: And you cover this so people can trust you. I hope so. And I was one. I'm not only the player, I'm a player president. Is that the lie?
--:-- Sean Rameswaram: More with Danielle when we return on Today Explained. One more chance.
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--:-- Sean Rameswaram: That's J-O-I-N-B-I-L-T dot com slash Explained.
--:-- Sean Rameswaram: Not all journalism is the same. Take The Guardian. Our coverage has something unique. Fierce independence.
--:-- Sean Rameswaram: Nobody owns us or tells us what we can and can't say. So we're free to report the whole picture.
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--:-- Sean Rameswaram: Read, watch, and listen to The Guardian for free at theguardian.com.
--:-- Sean Rameswaram: But then there's another group of Kirkland Signature Dads going, And hey, I had to work 30 hours a day to pay off my student debts.
--:-- Sean Rameswaram: And dads, I hear you. No one should be happy. Today Explained is back with Danielle Douglas Gabriel from the Post of Washington.
--:-- Sean Rameswaram: Danielle, despite the failure to get the Supreme Court's buy-in, how many people in this country have received student loan forgiveness as a result of J. Biden and J. Biden programs?
--:-- Danielle Douglas-Gabriel: In total, the Biden administration has approved more than $116 billion in student loan forgiveness for more than 3.4 million people.
--:-- Sean Rameswaram: Huh. That's a lot of money. That's a lot of money.
--:-- Sean Rameswaram: How does that compare to, say, previous presidents who have considered student loan forgiveness? I mean, certainly this knocks it out the park compared to any other administration.
--:-- Sean Rameswaram: And a part of this, again, as I said earlier, is a matter of cleaning up the messes of existing programs. So a lot of this forgiveness isn't coming through brand new policies. It is fixing problems in existing programs.
--:-- Sean Rameswaram: Has he done anything since the Supreme Court killed his plan? Sure.
--:-- Sean Rameswaram: I mean, just this month, the department began discharging the loans for 804,000 borrowers. This is about $39 billion of loan forgiveness.
--:-- Sean Rameswaram: The Department of Education today is announcing this plan, which looks at a system that connects repayment of loans to people's income level.
--:-- Sean Rameswaram: This is for people who have been in repayment for more than 20 or 25 years. And they're the ones who are getting their loans forgiven.
--:-- Sean Rameswaram: This is some significant amount of debt. I've spoken to borrowers who are benefiting from this who had like $64,000 in loans left, had $50,000 in loans left.
--:-- Sean Rameswaram: And they have this money left while they are quickly approaching retirement. So clearly they were never able to really save towards retirement Plus they were staring down the potential of having to be making these payments of over for some of these people while they you know at the tail end of their working lives
--:-- Sean Rameswaram: Has the student loan forgiveness that President Biden has managed to accomplish moved the needle at all on how politically feasible an idea this is?
--:-- Danielle Douglas-Gabriel: I don't know. I mean, in some ways, right? The idea that this plan could even get as far as it did before the court struck it down is still amazing to me.
--:-- Danielle Douglas-Gabriel: Two years ago, 10K was a ridiculous thing to ask for, and now we've just won it. So what that tells us and what that shows us is that we have to keep fighting.
--:-- Danielle Douglas-Gabriel: You know, I've been looking at this space and covering this space since about 2014. And the idea of broad-based debt cancellation probably came about really in the activist community around 2015, 16.
--:-- Danielle Douglas-Gabriel: We saw with a lot of former for-profit students who were pushing this idea of not having to pay debt that they felt they should never have had to take out.
--:-- Danielle Douglas-Gabriel: And they were kind of defrauded and such. And that really gained momentum. And that, because you decided to go and advance yourself through higher education, should not happen in this country.
--:-- Danielle Douglas-Gabriel: No how, no way. And so to see it turn into a viable policy is still amazing to me.
--:-- Danielle Douglas-Gabriel: And I think even though it was unsuccessful, it does expand the imagination of what is possible. And we're seeing more legislation trying to address issues of interest.
--:-- Sean Rameswaram: I mean, just last month, I think it was Joe Courtney who introduced legislation to have zero interest rate on student loans.
--:-- Sean Rameswaram: Now, if it passes, students would have three years to refinance and pay no interest. The bill would also automatically refinance any direct loans.
--:-- Sean Rameswaram: It's unlikely that's going to get anywhere in this very divided Congress. In this super capitalist country.
--:-- Sean Rameswaram: Yes, but the idea that people are pushing these sorts of policies that would have been laughed at, you know, five, ten years ago is still significant.
--:-- Sean Rameswaram: This all started in a presidential election like, I don't know, four-ish years ago. And it looks like we're already in another presidential election.
--:-- Sean Rameswaram: Is President Biden going to have some Republican counterparts proposing student loan forgiveness? Or is this just going to be him talking about it?
--:-- Danielle Douglas-Gabriel: I'm pretty sure it's just going to be him talking about it. Looking at the current Republican field.
--:-- Danielle Douglas-Gabriel: President Trump proposed limiting student loan borrowing to force colleges to limit tuition increases or cut tuition.
--:-- Sean Rameswaram: Don't get me wrong. There are conservatives who do believe that some form of very targeted student loan forgiveness makes sense.
--:-- Sean Rameswaram: But definitely not on the level of what this administration has tried to achieve.
--:-- Sean Rameswaram: And how do the American people feel about it at this point? There are a lot of people who feel sorry for people who are drowning in debt and unable to really make the most of their degree.
--:-- Sean Rameswaram: But there are also a lot of people who feel like this is not the best use of taxpayer dollars. Not everybody decides to go to college, So why should they have to pay for your student loan debt if you did?
--:-- Sean Rameswaram: They want working Americans to take on $430 billion in debt they didn't sign up for. This is also in part, you know, because this is higher education.
--:-- Sean Rameswaram: The idea that you are able to obtain a degree, even if it costs you all of this money, you still have a better potential of earning than someone with a high school degree.
--:-- Sean Rameswaram: At least that's the belief. By and large, the college seeking coalition is the elite coalition. It's disproportionately the Democratic coalition.
--:-- Sean Rameswaram: It has cultural hegemony. And in most cases, it has economic power.
--:-- Sean Rameswaram: I think more folks who have an understanding of how this looks in practice for a lot of Americans tend to be a lot more empathetic to this issue.
--:-- Sean Rameswaram: But if you are someone who still has outstanding student loan debt and it's an important political issue to you, chances are you're still probably voting for the only guy in the race who's talking about it.
--:-- Sean Rameswaram: I wouldn't be surprised. I mean, the only person who's still pushing the policy, who's still literally writing the rule to try to get you what you want, I would imagine would be your pick.
--:-- Sean Rameswaram: But of course, you know, voters are looking at lots of things right now. And while student loans is really a salient issue for many American households, it's not the only issue.
--:-- Sean Rameswaram: What do you think it was in the intervening four years that made this an issue that President Biden was sort of not that hot about to becoming one that he just is unrelenting over?
--:-- Danielle Douglas-Gabriel: Part of it, I think Joe Biden likes a good fight. And once he was on board, I don't think he was going to back down.
--:-- Danielle Douglas-Gabriel: He doesn't strike me as the kind of I'm going to back down on this issue kind of person, right? Especially when it was challenged in the way that it was with all these conservative groups just looking for ways to attack it and strike it down.
--:-- Sean Rameswaram: His reckless, unconstitutional, immoral student loan transfer scheme.
--:-- Sean Rameswaram: I think that probably made the president even more resolved to push this plan forward.
--:-- Sean Rameswaram: But I also think it's important to recognize the activist community that pushed this issue, pushed the issue to lawmakers, pushed this issue in the public space, constantly kept fighting for this.
--:-- Sean Rameswaram: And they are a part of the reason why it got to where it got to, even if it wasn't successful.
--:-- Sean Rameswaram: Danielle Douglas-Gabriel, Higher Education, Washington Post.
--:-- Sean Rameswaram: The program today was produced by John Ahrens. He had help from Jolie Myers, Amina Al-Sadi, Hadi Mawagdi, Amanda Llewellyn, and Christian Ayala.
--:-- Sean Rameswaram: I'm Sean Rameswaram. It's Today Explained. Thank you.
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