After a yearslong moratorium, federal student loan borrowers will restart repaying their debts on Sept. 1.
The resumption of repayments coincides with persistent consumer price increases, which have put pressure on household budgets, as President Joe Biden seeks to counter public pessimism about the economy and drum up support for his campaign before next year’s election.
If the 2024 election is a close race, expected to be against former President Donald Trump, “everything matters,” according to Democratic strategist Mary Anne Marsh, with abortion, gun control, climate change, and student loan debt forgiveness mattering “a lot” to younger voters.
“So absolutely, Democrats want them to turn out,” Marsh told the Washington Examiner. “The economy is moving in the right direction, but student loans are a big part of a lot of younger voters’s budgets.”
“Biden’s doing everything he can to get rid of student debt, lower it, eliminate it, every way he can. Republicans are doing nothing, nothing. And that’s the contrast there,” the Dewey Square Group principal said, including the Supreme Court‘s conservative majority. “Remind [voters] of everything they’ve done so far, remind them of what they’re working on, and remind them that Republicans aren’t lifting a finger to help them.”
However, federal student loan borrowers restarting their repayments should direct their ire to the root of the problem, which is “price-gouging” colleges that overcharged them for their schooling, per Alfredo Ortiz, president and CEO of Job Creators Network. Job Creators Network is a conservative advocacy organization that has and continues to challenge Biden’s debt forgiveness programs before the Supreme Court.
“Colleges have increased tuition each year at more than twice the inflation rate over the past couple of decades to pay for building booms, unnecessary administrators, and million-dollar salaries for sports coaches and presidents,” Ortiz said. “They have sold students a bill of goods. Only by directing students’ anger over their loan payments at colleges can we hold them accountable for the student debt crisis and fix the problem for the long term.”
Nevertheless, that has not prevented Biden’s student loan debt forgiveness programs from being mentioned on the Republican primary campaign trail.
“I have the good fortune of a mom who worked 16-hour days making sure we had food on our tables,” Sen. Tim Scott (R-SC) said during the candidates’ first debate. “She taught me that if you’re able-bodied in America, you work. If you take out a loan, you pay it back. If you commit a violent crime, you go to the jail. And if God made you a man, you play sports against men.”
For Aaron Stephens, senior legislative strategist for P Street, the Progressive Change Campaign Committee’s government relations arm, it is important for Biden to “not be seen as holding the bag for people’s student debt.”
“The best way to avoid that is to take swift and bold steps to cancel debt for those most in need while making clear to the public that those blocking progress for the millions of borrowers are extremist Republicans and the increasingly politicized Supreme Court,” Stephens said.
Biden’s reelection campaign is mindful that younger voters are casting ballots based on their personal finances, in addition to protecting their freedoms and against Republicans’ “extreme” agenda, with abortion being the most motivating issue.
“Let’s take the example of Ohio,” a Biden campaign spokesman said of this month’s special election, which would have made it more difficult to amend the state’s constitution regarding abortion. “What we saw was really high performance and high turnout in college towns, which I think is an indicator of understanding the stakes of elections and also just directly tying them to the issues.”
At the same time, Democrats, including Christopher Hahn, a former aide to Senate Majority Leader Chuck Schumer (D-NY), are not confident Biden’s more modest student loan debt forgiveness program will be upheld by the Supreme Court after the bench struck down the first one forgiving $10,000 for borrowers earning less than $125,000 a year and $20,000 for eligible Pell Grant recipients.
“We need a permanent fix to student loans,” the Aggressive Progressive podcast host said. “Congress should step in to reduce and, in some cases, eliminate interest and make repayment as flexible as possible.”
Instead, 90 Democratic lawmakers called on Biden this week to do more concerning student loan debt forgiveness on the first anniversary of his original proposal.
“We urge you to continually find ways to use your authority to bring down student debt, address the rising cost of college, and make postsecondary education affordable for all students who choose that path,” Sen. Elizabeth Warren (D-MA) and Rep. Ayanna Pressley (D-MA) wrote in a letter Wednesday.
“The student debt crisis is impacting folks across the country, and thanks to the callous Supreme Court, borrowers are facing a financial cliff this fall,” Pressley added on social media. “That’s why @POTUS must deliver #CancelStudentDebt as quickly as possible and go as broad & deep as the hurt is.”
Meanwhile, Biden implored federal student loan borrowers this week to apply to his administration’s SAVE Plan, an income and family-size-driven program aiming to limit monthly repayments and cap interest accrual, coordinating outreach with Civic Nation, NAACP, National Urban League, RISE, the Student Debt Crisis Center, UnidosUS, and Young Invincibles. The president, too, has reformed public service forgiveness and provided relief for borrowers with disabilities or who were defrauded, saving 3.4 million people $116 billion combined.
Biden administration officials defended the SAVE Plan from criticism it is regressive, contending the program will “disproportionately” aid low-income federal student loan borrowers because repayment amounts are calculated on income.
“It has an impact on homeownership, small business formation, retirement savings, family formation,” one official said. “As a result, helping students with student debt helps not only those borrowers, but it also helps create stronger families, stronger communities, and a stronger economy.”