The NAACP lashed out at reports that President Joe Biden will forgive only $10,000 in federal student loan debt, calling the plan a “devastating political mistake” and accusing the president of violating his campaign promises.
In several tweets and a CNN op-ed, NAACP President Derrick Johnson demanded that Biden unilaterally forgive a minimum of $50,000 in student debt. He argued that black Americans hold a disproportionate amount of student debt and that debt forgiveness is a “racial and economic justice issue.”
“@POTUS’s decision on student debt cannot become the latest example of a policy that has left Black people, especially Black women, behind. This is not how you treat Black voters who turned out in record numbers and provided 90% of their vote to once again save democracy in 2020,” Johnson said.
Student loan debt in the United States totals $1.75 trillion, and federal loans account for 92.7% of all that debt. There are 40.3 million borrowers with federal student loans, with an average debt balance of $37,667.
On the campaign trail in 2020, Biden promised to forgive “all undergraduate tuition-related federal student debt” for college graduates earning up to $125,000. But translating that promise into reality has proven difficult for the Biden administration, which lacks authority from Congress to forgive most student debt.
Using existing federal programs, the Biden administration has canceled $32 billion of student loan debt for 1.6 million borrowers — but progressives have demanded that Biden go further and cancel all loan debt using an executive order.
The plan Biden announced Wednesday will cancel $20,000 in student debt for those with Pell Grants and $10,000 for those who didn’t receive Pell Grants who earn less than $125,000. It will also extend the moratorium on student loan repayment, at a total cost of roughly $300 billion, according to the Penn Wharton Budget Model.
Left-wing critics like Johnson say Biden’s plan does not go far enough.
“We are fed up. The NAACP has been calling for a minimum of $50,000 in student loan debt cancellation because our research indicates it is what is necessary to make a meaningful difference. The goal should be to see the most amount of relief for the highest number of borrowers,” Johnson wrote for CNN. “Even so, President Biden has indicated that he is not considering a $50,000 debt reduction. But canceling just $10,000 in debt would be bad public policy and a devastating political mistake.”
And on the other side, conservatives say Biden lacks the authority to forgive student loans without an explicit act of Congress and that even if he could, he shouldn’t, because people who did not borrow more than they could afford will be punished for their responsibility.
Economists say loan forgiveness creates a moral hazard by signaling to borrowers that they don’t need to pay off their debt because the federal government will bail them out.