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Canceling at least $10,000 of student loan debt per person was a campaign pledge that helped President Biden get elected. Now, the Biden administration is planning to move ahead on this through executive action. While the proposal is not finalized, plans for relief are tied to income. NPR's education correspondent Cory Turner joins Geoff Bennett to discuss who would benefit.
It was a campaign pledge that helped President Biden get elected canceling at least $10,000 of student loan debt per person. As we've reported last weekend, multiple sources say the Biden administration is now planning to move ahead on this through executive action. The White House has not finalized the proposal that plans for the relief to be tied to income.
President Biden has also said he's not planning to weigh $50,000 in loan debt per person, as some Democrats have been pushing for. For more on this, I spoke with NPR education correspondent Cory Turner. And I started by asking him who would benefit from the relief,
Cory Turner, Education Correspondent, NPR:
It's important to remember we're talking about 45 million federal student loan borrowers. According to the latest federal data, if the president forgives $10,000, that's going to fully wipe out the debts for about 12 million people.
You know, you — the recent review by the Federal Reserve Bank of New York found that this plan without income caps would slightly preference higher income borrowers it's been reported that President Biden is considering pretty high income caps of around $150,000 per individual. And between 250 and $300,000 per couple.
You know, the timing is unclear. I was speaking with a few sources just the other day who said they feel like this is still a few weeks in the making, because it's still complicated. And they need to make sure they get this right. Not only legally but also, logistically, you know, I don't need to remind borrowers that they've been in a payment and interest moratorium for more than two years. And so doing anything of this scale at this point, is going to take some time.
I want to draw you out on that because NPR did some reporting recently that found that the government's income driven repayment plan has been riddled with problems that have either delayed or denied many borrowers from getting this sort of loan forgiveness that they qualify for. What more can you tell us about that?
Yes, we did a lengthy months long investigation into these IDR plans and found that it wasn't just one problem. It was really a constellation of problems. And these are big plans that cover millions of borrowers. We found that borrowers who were making very small payments, perhaps even $0 payments because their income was so low weren't getting credit towards forgiveness. Again, the plan promises loan forgiveness after 20 to 25 years.
We also found that just the general record keeping for these plans was really, really poor. And the older the loans the less likely it was to have clean, clear, understandable records of payments for borrowers.
And Cory, as we wrap up this conversation, what about restructuring the Loan Repayment Program? I've talked to administration officials who say that the President might be open to capping interest rates either making them low interest or no interest. There's also been some talk about allowing more public sector workers to qualify for debt relief programs.
Have you picked up any of that in your reporting? And would any of that really move the needle in a in a sort of significant way?
I have actually spent the past week talking with folks about interest rates. You know, the interest rate for federal student loans for next year is about to go up next week. And it's going to go up probably by quite a bit.
So I've been talking with folks about the possibility of capping interest rates, about scaling back interest. There's one possibility called an income share agreement that could work in this sort of situation. And there are possibilities.
It's hard to know what the education department and the government are, are really taking seriously at the same time that they're trying to figure out debt cancellation.
Yes, it's still very much a work in progress. NPR's Cory Turner. Cory, thanks so much for sharing your reporting and your insights with us.
Thank you, Geoff.
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