In the race against time to try to mitigate the effects of his waning popularity for the midterm legislative elections, Joe Biden has made new nods towards a campaign promise that is a historic demand from part of American society: the forgiveness of student debts.
Even though the measure has not yet been made official, the president has seen pressure on the issue grow in the form of letters sent to the White House — which arrive in a coordinated manner, as part of a campaign. The hashtag #pensforbiden (pens for Biden) has encouraged the population to send letters to the official residence of the Presidency demanding that he enforce the promise.
“Dear President Biden […]we trust you as a man of your word and we all know that you have the executive power to sign a debt forgiveness act [estudantis]; mine prevents me from actively participating in the economy,” wrote one of the senders. “Maybe you can’t find a good pen to sign the measure, so I’m sending one.”
Debts are currently valued at around US$ 1.4 trillion (R$ 6.8 trillion), and voters are betting on electoral timing to organize the campaign: with the so-called midterms approaching —scheduled for November 8—, in which the Democratic majority in Congress is at stake, they know Biden needs to turn his popularity around.
There is a debate about the power that the president would have to unilaterally decree a pardon, but in any scenario, time is short. If he came straight from the Executive, Biden should do so soon, to try to bolster the weakened support base; if he forwarded the proposal to the Legislature, he would have to take advantage of the months when he still knows he will have a parliamentary majority, even if it is narrow.
In April, he again extended the moratorium on student debt payments, then set for May 1, until August 31. The measure, a way to mitigate the effects of the pandemic on the economy, represented a historic 30-month pause in payment.
The most recent nod came in the last week. After a meeting of the president with members of the Congressional Hispanic Caucus, the caucus of Latino lawmakers, the American press reported that Biden was in favor not only of extending the moratorium, but also of taking bolder measures to alleviate debts.​
“This type of measure indicates a shift of the Democratic Party more to the left,” says Carlos Poggio, an expert on American politics and a professor at FAAP. “These are issues that were taboo, were more on the fringes of the party and now they reach the center. And Biden is a kind of politician who goes where the party’s center of gravity is.”
The cancellation of student debts was raised as a campaign banner in the 2020 election not by Biden, but by other names who ran in the Democratic primaries – notably Elizabeth Warren and Bernie Sanders, both senators. The former vice president was thus forced to embrace the proposal to forge alliances.
Warren is one of those who have echoed the demand. “We don’t ask elementary or high school students to take out loans to go to school, but universities are also vital to the 21st century economy, and our system buries students in debt; we need to put higher education within everyone’s reach.” wrote the Democrat in a tweet last Thursday (28).
The support of the younger ones also weighs heavily, those who would benefit the most from debt relief and who, on the other hand, have distanced themselves from Biden. “These are policies largely defended by the younger, liberal and urban wing of the Democratic Party,” says Poggio.
April’s Gallup poll shows that the 18-29 age group was the one that stopped supporting the president the most since the beginning of the term: approval, which was 61% in the first semester of the administration, went to 38% in the semester ended. in March. The percentage drop is the biggest compared to the other groups, and so is the approval rating.
Some Democrats, such as progressive congresswoman Alexandria Ocasio-Cortez, make the correlation that, by forgiving debts, Biden could reconnect with that slice of the electorate. “It’s in his hands, and no one else’s,” AOC said in a recent interview with NY1.
Five Republican senators on Wednesday introduced a bill, describing Biden’s policies in the area as reckless, to prohibit the president from extending the moratorium term and from forgiving debts. They argue that “working families should not be responsible for continuing to bear the costs of this”.
Calculations by the Federal Reserve Bank of New York give an idea of ​​how much debt relief would cost the country. If the cap of US$ 10,000 per person were established, as some proposals suggest, the total value would be US$ 321 billion. If the ceiling were US$ 50,000, the figure would go to US$ 904 billion — 4.7% of US GDP. About 37.9 million Americans have federal student loans payable.
The value can be alleviated with a lock on family income. If only those with a family income of up to US$ 75 thousand are benefited, the research shows, the amount drops to US$ 182 billion (in the case of US$ 10 thousand per person) and to US$ 507 billion (in the case of US$ 50,000).
The income limit, rather than reducing the cost of forgiveness, increases the portion of the benefit destined for indebted people who have greater difficulty paying the debt — those with low incomes and non-whites.
“It’s a repayable debt that the state would be able to afford,” says political scientist Hussein Kalout, a Harvard researcher. “And looking at the medium term allows us to see that it is not a burden, but a bonus for the country, the possibility that, in an increasingly competitive world, a young person does not start his career in debt.”
Kalout, also an international advisory adviser to the Brazilian Center for International Relations (Cebri), also points out that alleviating or forgiving debts could strengthen Democratic strongholds in some states. “This would favor the middle class in traditionally conservative spaces, since, in recent years, there has been a migration of union and worker bases to the republican platform.”
And there is the racial component. Black college students owe an average of $25,000 more in student loans than white college students, according to data compiled by the Education Data Initiative.
In a recent article, Andre M. Perry, a PhD in education policy and an associate at the Brookings Institute, argued that university debt further contributes to the fragility of the rising black middle class. “Debt reinforces the racial wealth gap,” he wrote.
“It can delay many personal decisions: where to live, when to start a family or start a business. Cancellation alone does not lead to equity between black and non-black families, but it will allow for a stronger participation of blacks in the economy.”
