The Biden administration is trying to figure out how much student debt to write off and how to go about it – through executive action or legislation.

MICHEL MARTIN, HOST:

We now want to turn to a problem that affects tens of millions of Americans. We are talking about student debt. About 43 million federal borrowers collectively owe about $ 1.6 trillion. It was a signing issue for a number of Democratic presidential candidates, and Democrats are still debating what to do about it. And this week at a CNN town hall, a commenter put President Biden on the line, asking him specifically if he would be in favor of forgiving $ 50,000 in debt per borrower. Here is part of President Biden’s response.

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PRESIDENT JOE BIDEN: We should eliminate the interest on the debts that are accumulating, in the first place. And number two, I’m willing to write off the debt of $ 10,000, but not 50.

MR MARTIN: And the president went on to say that he didn’t know if he had the power to write off so many debts. We wanted to talk more about it. So we have now joined Elissa Nadworny from NPR, who covers higher education. Elissa, welcome. Thank you very much for joining us.

ELISSA NADWORNY, BYLINE: You bet.

M MARTIN: Forgive me for asking you, for putting you on the spot, but do we know? Does the president have that authority or not?

NADWORNY: Well, we’ve got – you know, we’ve got people on both sides saying yes and no. Like, Trump’s attorneys at the Education Department, before Biden was sworn in, released a memo and said no, it was illegal. Meanwhile, attorneys at Harvard’s Project on Predatory Student Lending say, yes, that’s exactly how the law was designed. It has never been tested in court and the Biden administration has said it is looking at the legal arguments.

MR MARTIN: And there are also questions about who would actually benefit from the loan forgiveness. And you’ve done a lot of reporting on this. So I would like to ask you – who actually has student debt in this country? You say there are misconceptions about who has this student and who is having difficulty. So can you explain this to us?

NADWORNY: So let’s start with who takes out student loans first. I spoke to Jalil Bishop. He is a researcher at the University of Pennsylvania. And he organized it really well.

JALIL BISHOP: What we know from the research is that those who borrow student loans are due to the fact that they come from family or personal financial situations where they do not have the assets or the income to pay for an education. higher.

NADWORNY: So families with student debt tend to have the least wealth. So it’s different from income, which is important. For undergraduates, there are limits to the amount you can borrow. Larger debts therefore tend to arise for people with higher education. But, really, high debt is rare. Thus, only 6% of borrowers owe more than $ 100,000. People who are really in trouble tend to have lower debts, so less than $ 10,000. And that’s because, often, they haven’t finished. So they – you know, they only went for a year or a semester. Black borrowers and students who attended for-profit schools also have higher debt balances and are more likely to default.

MR MARTIN: So Biden’s $ 10,000 figure doesn’t come out of nowhere.

NADWORNY: Yeah.

MR MARTIN: There is a kind of target population that would really benefit. But how would these debt relief plans target people who need help?

NADWORNY: So the $ 10,000 forgiveness plan would help those who are having the most difficulty. This would wipe out balances of about 30% of borrowers. But a $ 50,000 rebate would pay off the debts of about 80% of borrowers, including more black borrowers. Proponents argue that this would close the wealth gap and achieve racial equity.

MR MARTIN: So before I let you go – so it’s – it’s obviously a very complicated question. It’s just not a question of whether people would like to do this or not; he’s obviously got a – kind of a deep stem, and there are all kinds of aspects. But is it in the realm of the possible?

NADWORNY: I mean, the reality is that Biden has said over and over again that he prefers to tackle student loans through Congress. It will take a lot of negotiation. But he’s under a lot of pressure from the Democratic side, more than we’ve seen in a long time.

MR MARTIN: It was Elissa Nadworny from NPR. Thanks, Elissa.

NADWORNY: You bet.

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