White House stands still on February 1 after student loan cancellation ends

One of those “tense meetings,” described by someone familiar with what transpired in the conversation, took place on Wednesday. Advocates of the loan cancellation have told members of Biden’s national political and economic teams that beyond the actual economic, legal and political implications of lifting the loan repayment pause, the move was “wrong. politically ”. They wanted to “sound the alarm bells for them on what we believe is a very serious political mistake that they are about to make,” said a second source close to the conversation.

Biden’s team has not been moved.

Several sources familiar with what was said at the meeting described the administration’s message as effective that borrowers had two years to prepare for it and knew the hiatus wouldn’t last forever. An administration official at the meeting suggested that overall the pandemic was heading in the right direction and that the resumption of student loan repayments was part of the return to normal.

The White House has also ‘pulled this kind of bullsh – from’ the fundamentals of the economy are strong ‘which is devoid of reality,’ added the first source familiar with the conversation. “Yes, of course the stock market can be better. The unemployment figures are better – yes, absolutely. But in terms of real wages, in terms of how people feel in their wallets, it’s completely illusory. “

In the eyes of supporters of debt cancellation, the ramifications of lifting the recess are dire. Not everyone is feeling the effects of a recovering economy. Rising prices and now a new variant of the coronavirus are causing widespread discomfort. And at the start of an electoral cycle, a decision like this could affect turnout and enthusiasm, especially among younger voters, who are already unreliable midterm voters.

Arisha Hatch, Vice President of Color of Change, did not attend the meeting but described the political perspective thus: “Our early research showed that people would make political decisions based on this issue. When you combine it with quite a tale of the struggles Democrats face [in] in pushing forward an economic agenda that actually offers relief to people, a lot of people were wondering: what’s the narrative, what’s the story, what’s the push when you go back to voters in this next election cycle? “

Some of the debt cancellation supporters left the meeting feeling the White House did not yet have a comprehensive plan in place. “It was like the tail was wagging the dog,” said a third person familiar with the meeting. “Like someone at one point a few months ago said, ‘We can’t keep this thing on hiatus forever. And so everyone went into run mode, and no one stopped to think about what They did. And now we are here.

The White House declined to comment on the meeting minutes, but administration officials again insisted the loan repayment pause was still meant to be temporary, and highlighted the measures the administration has already taken in this area – including forgiveness of “$ 12.7 billion in student loan debt.”

An administration official said he expected announcements “in the weeks and months to come” on what resources will be available so borrowers who have already battled the pandemic can take advantage of the right payment plan, including including the carry over.

“The Education Department is taking a number of steps to make sure it’s not just some kind of cold turkey,” the official said. “We try to take all possible measures to do good to borrowers. “

As for the Department of Education’s review of whether Biden has the power to unilaterally write off at least $ 10,000 in student debt per borrower – which Biden has campaigned on – administration officials said conversations were still ongoing and no final decision had been taken. An official said Biden was still prepared to sign a $ 10,000 student loan cancellation bill if Congress could pass it.

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