Speaker 1: The political fight over student debt rages on as Democrats
Speaker 1: and Republicans clash over what will actually help a large
Speaker 1: sector of the US population. Republicans in Congress say that
Speaker 1: President Biden's student debt cancelation plan is too expensive for taxpayers,
Speaker 1: and that it's not fair to Americans who didn't attend college,
Speaker 1: don't have student loans, or already paid them off. There's
Speaker 1: also concern about the impact of student loan forgiveness on inflation,
Speaker 1: which is the battle the Fed has already been fighting
Speaker 1: for months. But then there's consumer spending. By some estimates,
Speaker 1: the return of student loan payments will cut consumer spending
Speaker 1: by up to nine billion dollars each month because borrowers
Speaker 1: won't have money to put back into the economy. To
Speaker 1: get a sense of what progressives see as the way
Speaker 1: forward on canceling student debt, I sat down with Senator
Speaker 1: Elizabeth Warren of Massachusetts in her Senate office here in Washington.
Speaker 2: Why folks can't afford to send me to college. But
Speaker 2: I made it through four years of college with not
Speaker 2: a penny of student loan debting. You know why, because
Speaker 2: when I went to school, you could go to the
Speaker 2: University of Houston, where I went for fifty dollars a semester,
Speaker 2: I could go to college and pay for it on
Speaker 2: a part time waitressing job. That opportunity is just not
Speaker 2: out there for most of our kids.
Speaker 1: Bloomberg White House correspondent A Kayla Gardner also joins me
Speaker 1: to look at how the other side of the aisle
Speaker 1: is viewing the issue of student debt and what this
Speaker 1: all means for the administration heading into twenty twenty four.
Speaker 3: If you look at pulling student debt, cancelation is pretty split.
Speaker 3: It's pretty divided amongst the elector at large.
Speaker 1: Americans are now preparing for student loan payments to resume,
Speaker 1: but the Biden administration is working on a Plan B
Speaker 1: to help all those borrowers who had high hopes of
Speaker 1: getting a little help with the burden of student debt.
Speaker 1: We spoke to a few student borrowers about what they
Speaker 1: hope comes next.
Speaker 4: My hope for the Biden administration student loan forgiveness is
Speaker 4: that they come up with another plan. There's so many
Speaker 4: borrowers that really believe that getting these loans and being
Speaker 4: able to pay them back after graduation would help them
Speaker 4: in the future. But the high interest rates have them traps.
Speaker 1: My hope from the Biden administration is that their Plan
Speaker 1: B is able to go through utilizing the Higher Education Acts.
Speaker 2: I also like their idea.
Speaker 3: Of the on ramp. My biggest thing is I want
Speaker 3: them to look at it from an equitable standpoint and
Speaker 3: just say, y'all made a decision, the better your life,
Speaker 3: you shouldn't have to spend your whole life paying for it.
Speaker 1: I'm Nancy cook In today for west Kosova Today on
Speaker 1: the Big Take, what's next for student loan forgiveness after
Speaker 1: the Supreme Court rejected the Biden administration's first attempts. Senator
Speaker 1: Elizabeth Warren is a fierce advocate for the Biden loan
Speaker 1: forgiveness plan, so I asked her what the next steps
Speaker 1: are for those who still hope for student debt relief
Speaker 1: and how the administration is setting the scene for a
Speaker 1: Plan B. Senator Warren, the Supreme Court struck down President
Speaker 1: Biden's efforts to cancel student debt. Now the administration wants
Speaker 1: to keep pursuing it, only using a different legal rationale.
Speaker 1: But I'm curious, since they've struck it down the first time,
Speaker 1: won't they just strike it down again?
Speaker 2: Well, you're asking me, will the Supreme Court play politics
Speaker 2: a second time in the row or third, or fourth
Speaker 2: or fifth. What the President is doing is exactly what
Speaker 2: he should be doing. He says, I got a big toolbox,
Speaker 2: and I'm gonna use every tool in that toolbox. He
Speaker 2: has already canceled student own debt for three point four
Speaker 2: million people. It's over one hundred billion dollars in debt
Speaker 2: that has been canceled. And now he's picking up another
Speaker 2: tool and says, Okay, they told me I couldn't use
Speaker 2: this particular law. I'm going to try another one here.
Speaker 1: One thing that we haven't heard from the White House
Speaker 1: on this, I'll call it a plan B of using
Speaker 1: day legal rationale, is what the scope of the plan
Speaker 1: would be. Who would qualify in terms of their income,
Speaker 1: how much debt would be canceled? What would you like
Speaker 1: to see from the administration on those numbers.
Speaker 2: My position is pretty clear. More is better, More and
Speaker 2: more and more is my answer. I got three answers there,
Speaker 2: But I understand it this way. He is going through
Speaker 2: what's called negotiated regulation, So he's walking through the process.
Speaker 2: I very much hope that he's going to make this
Speaker 2: as broad as he can, But this is what negotiated
Speaker 2: regulation is about. They're pushing him into another tool. So
Speaker 2: he's going to dot every eye, cross every t give
Speaker 2: the court as little room as possible to overturn him,
Speaker 2: and part of that will be constructing a plan under
Speaker 2: this other statutory authority.
Speaker 1: So do you think that it's likely that we'll see
Speaker 1: the same numbers we did for the last plan, which
Speaker 1: was twenty thousand dollars for pelgrant recipients, ten thousand dollars
Speaker 1: in cancelation for other borrowers with an income threshold of
Speaker 1: one hundred and twenty five thousand dollars a year.
Speaker 2: I think that's entirely possible. But I think that's what
Speaker 2: I know. That's what negotiated regulation is about. This is
Speaker 2: why they have a committee, this is why they put
Speaker 2: it out for notice and a comment. So it may
Speaker 2: not look one hundred percent like what he has put
Speaker 2: forward under a different law, but here's what I guarantee,
Speaker 2: It'll be something that comes from the same perspective how
Speaker 2: to help the people who most need that help. Because
Speaker 2: here's what I want to always remind everybody about the
Speaker 2: President's plan that the Supreme Court struck down, and that
Speaker 2: is ninety percent of the help was going to people
Speaker 2: who make less than seventy five thousand dollars a year.
Speaker 2: This was a plan that was going to wipe out
Speaker 2: all student loan dead for more than a quarter of
Speaker 2: all African American borrowers and half of all Hispanic borrowers.
Speaker 2: You know, you say student loandad and people immediately think, oh,
Speaker 2: fancy college, four year diploma, high earner. But that's not
Speaker 2: the description of who has student loan debt in America.
Speaker 2: Forty percent of the people dealing with student loan debt
Speaker 2: don't have a diploma. There are a lot of people
Speaker 2: who are in a family that can't afford to write
Speaker 2: a tuition check. But they've tried. They've tried a semester
Speaker 2: of college a year, and life happened. When I hear
Speaker 2: somebody get on their high horse and say, well, I
Speaker 2: didn't take on debt to get here, I worked, you
Speaker 2: better understand America shifted. We don't make the same kind
Speaker 2: of investments in higher ed opportunities for people that we
Speaker 2: were making two generations back. Student loan debt has become
Speaker 2: the substitute to say to everybody, everyone's got an opportunity,
Speaker 2: but it's an opportunity right now that comes with a
Speaker 2: terrible hook in the middle of it.
Speaker 1: How do you think that the White House and the
Speaker 1: Biden campaign is going to use this politically? This you
Speaker 1: heading into the twenty twenty four election.
Speaker 2: You can call it politics. But what he's going to
Speaker 2: do is you can tell the truth, and that is
Speaker 2: that he's on the side of working people. And he's
Speaker 2: got a Supreme Court that jumped in and took on
Speaker 2: a case they should never have taken on, did not
Speaker 2: follow the law, and reached out in order to substitute
Speaker 2: their opinion on student loan debt for that of Congress
Speaker 2: and the President of the United States, the elected officials
Speaker 2: who clearly had the authority under the statute to do
Speaker 2: this work.
Speaker 1: And what do you say to your Republican colleagues, who
Speaker 1: many of whom say and there was even a Bloomberg
Speaker 1: editorial on along these lines in recent months that said, look,
Speaker 1: no one has to take out student debt. This is
Speaker 1: not an obligatory thing. If you decide to borrow the money,
Speaker 1: you know it's your responsibility to pay for it. What
Speaker 1: do you say to those credits?
Speaker 2: So I just want to redescribe that conversation just a
Speaker 2: little bit.
Speaker 1: Please.
Speaker 2: What you're saying is to some eighteen year old. So hey, listen,
Speaker 2: I know it sucks to be born into a family
Speaker 2: it doesn't have money. But here's the deal, don't try
Speaker 2: just quit. I not only think that is just plain ugly.
Speaker 2: I think it's bad for our democracy, I think it
Speaker 2: is bad for our economy. And let me give you
Speaker 2: an example of why. Back following World War Two, America
Speaker 2: said to the returning gis, we're going to make an
Speaker 2: educational opportunity available to you. Now not perfectly executed. We
Speaker 2: made sure it was open to many people, but not
Speaker 2: to African Americans. And it turns out that we've studied
Speaker 2: the data on this. What happened by educating just a
Speaker 2: whole cohort of men, just kind of one generation of men.
Speaker 2: And the answer is, they're earnings so skyrocketed that they
Speaker 2: paid more than six times the amount of money that
Speaker 2: was given to them under the GI Bill, just in
Speaker 2: their taxes, just their personal taxes. So they paid this
Speaker 2: back to the American taxpayer many times over. But here's
Speaker 2: the thing. They built the most robust economy in the
Speaker 2: history of the world. They expanded home ownership, They built
Speaker 2: America's middle class out of an infusion of support into education.
Speaker 2: I want to be the America that says, if you're
Speaker 2: young and you try hard, then we are willing to
Speaker 2: support you in education. Now, we can do that by
Speaker 2: making college free or making college fifty bucks a semester.
Speaker 2: But if we're not going to do that, let us
Speaker 2: not say We're just going to lend you the money
Speaker 2: and if anything goes wrong, your life is destroyed financially forever.
Speaker 2: So maybe you'd be better off not to try. I
Speaker 2: don't want to be that. Don't try America.
Speaker 1: There's a really interesting program that the Biden administration is
Speaker 1: starting to do as part of the Student Loan Plan,
Speaker 1: the Income Repayment Plan. One thing I am curious about, though,
Speaker 1: is the Department of Education is being asked to do
Speaker 1: so much right now, like develop these new rules and
Speaker 1: take in comments in my own reporting, I have heard.
Speaker 1: You know, they're underfunded and understaffed. Do you think that
Speaker 1: they have the money and manpower to kind of take
Speaker 1: on all these really big long term policy questions and changes.
Speaker 2: Yeah, boy, this is a real problem. And let's face it,
Speaker 2: they don't have any choice. It is what is upond them.
Speaker 2: There's been a real disconnect here. The Department of Education
Speaker 2: is being asked to do more and it got its
Speaker 2: budget cut, and that's a real problem for them. The
Speaker 2: people who work there are good, hard working public servants.
Speaker 2: We're trying to get this right. We're trying to follow
Speaker 2: the rules that the lawyers tell them, that the courts
Speaker 2: tell them, that Congress tells them, and they just they
Speaker 2: don't have enough people because they don't have enough budget
Speaker 2: to get this done. It raises like this other issue
Speaker 2: that runs through Washington. Dar you see, we've had an
Speaker 2: IRS that's been underfunded.
Speaker 1: Do you think that this is similar situation?
Speaker 2: So I think it's very similar because it's the same
Speaker 2: kind of Republicans who don't like what the Department of
Speaker 2: Education is trying to do. When you underfund, you bear
Speaker 2: down on good people who are just trying to do
Speaker 2: their jobs, and then they end up with lousy customer service,
Speaker 2: lousy capacity to serve the public, which makes it a
Speaker 2: frustrating job. But it also makes it frustrating to people
Speaker 2: on the other end. It doesn't work if you're not
Speaker 2: willing to pay for it.
Speaker 1: When we come back white House correspondent A Kayla Gardner
Speaker 1: joins me for a look at what the other side
Speaker 1: of the aisle thinks about students at forgiveness and what
Speaker 1: it all means for twenty twenty four. Joining me now,
Speaker 1: Bloomberg's White House correspondent, A Kayla Gardner. A Kyla, thank
Speaker 1: you so much for joining me.
Speaker 3: I'm so excited to be doing this with you.
Speaker 1: I know we've written a lot of stories about student
Speaker 1: loan debt cancelation together, so we're reunited. Yes, How are
Speaker 1: Republicans and people who are skeptical of this plan going
Speaker 1: to continue to fight the Democrats on this and what
Speaker 1: are the most potent arguments that they're making.
Speaker 3: I think the best example of this is the House
Speaker 3: Education Committee. We have seen that committee pretty consistently criticizing
Speaker 3: the administration over their original plan. We actually saw a
Speaker 3: bill pass out of the House in the Senate to
Speaker 3: cancel this program before the Supreme Court ruling. They even
Speaker 3: criticized Biden for this thirty nine billion dollar cancelation that
Speaker 3: we saw recently, which was basically the administration writing years
Speaker 3: of wrongs of millions of folks who had been paying
Speaker 3: into this income driven repayment plan for twenty to twenty
Speaker 3: five years, but hadn't received forgiveness basically because these were
Speaker 3: poorly managed. And they even called that illegal, even though
Speaker 3: this program has been around for so long and these
Speaker 3: folks had been promised this debt cancelation. But their argument
Speaker 3: is basically that it's not fair for taxpayers who did
Speaker 3: not go to college, specifically because it was expensive, or
Speaker 3: folks who chose to go to the trade field. It's
Speaker 3: not fair for them to have to pay for someone
Speaker 3: else's decision. And that's sort of the core of their
Speaker 3: argument here.
Speaker 1: You know, I talked with Senator Warren about Biden's loan
Speaker 1: cancelation plan, and she was really saying that the Biden
Speaker 1: administration should keep trying to push forward on soon loan
Speaker 1: cancelation even though the Supreme Court struck down its first attempt.
Speaker 1: O Kayla, you've written about Chief Justice Roberts's opinion in
Speaker 1: the case and why it hints at his potential opposition
Speaker 1: to this secondary plan. Can you explain that to us.
Speaker 3: I'm not surprised that Senator Warren said that we've been
Speaker 3: writing since January of this year that progressives had wanted
Speaker 3: them to have this plan be in place in case
Speaker 3: the Supreme Court struck down their original plan, and folks
Speaker 3: like Elizabeth Warren had said they should have always used
Speaker 3: the Higher Education Act. They believe that has more authority
Speaker 3: and more flexibility, and that's something that legal experts said
Speaker 3: as well. It gives a broader authority than the Heroes Acted.
Speaker 3: But even though Justice Roberts was ruling on the Heroes Act,
Speaker 3: he still mentioned the Higher Education Act in his opinion
Speaker 3: as just one of these examples of what he believes
Speaker 3: the executive branch has authority in terms of student debt cancelation.
Speaker 3: But he laid out very specific circumstances that frankly, the
Speaker 3: government is already using to cancel debt forgiveness, and that
Speaker 3: is forgiveness for public servants, so nurses, firefighters, people who
Speaker 3: have gone bankrupt, people who have been severely or permanently disabled,
Speaker 3: folks who have died, or people that have been defrauded
Speaker 3: by their institution or closed down. And so he laid
Speaker 3: that out, and one legal expert basically said he was
Speaker 3: telling the Biden administration, don't try this again. In short, like, basically,
Speaker 3: we know you're going to try this. It's not going
Speaker 3: to work. So any federal court that looks at that
Speaker 3: opinion as a president or if it actually goes back
Speaker 3: to the Supreme Court again, they're going to reference that
Speaker 3: opinion when they're ruling.
Speaker 1: And what's the timeframe for the administration to unveil this plan?
Speaker 1: B When can we expect it?
Speaker 3: Most folks this is think that this is going to
Speaker 3: take at least a year beyond the twenty twenty four election,
Speaker 3: and so we might not see this until the fall
Speaker 3: of twenty twenty four. Exactly what the plan is, because
Speaker 3: all we know right now is that it's a plan
Speaker 3: and they want it to help as many borrows as possible.
Speaker 2: That's it.
Speaker 3: But right now they are going through this negotiated rule
Speaker 3: banking process which many government agencies use, where they collect
Speaker 3: comments and sort of hear different stakeholders' opinions on what
Speaker 3: the ruling should be. But I can't imagine them releasing
Speaker 3: something that's so narrow and scope and having that sort
Speaker 3: of fill the gap of the last plan. So of
Speaker 3: course we're just anxiously awaiting those details. But once it
Speaker 3: comes out, that's when legal experts and I'm sure there's
Speaker 3: manynservative groups that are waiting for the ccilia, And just
Speaker 3: to challenge it again.
Speaker 1: We have estimates from experts at the Penn Wharton Budget
Speaker 1: think Tank at the University of Pennsylvania that estimate that
Speaker 1: this plan or are plan similar to it, because we
Speaker 1: don't know the details yet, could cost you know, anywhere
Speaker 1: up to five hundred billion dollars. What does the Biden
Speaker 1: administration say to people who are worried about how this
Speaker 1: would add to the deficit, particularly when inflation has been
Speaker 1: historically high for the past two years.
Speaker 3: Well, I think the administration's talking point is always that
Speaker 3: they brought the deficit down right compared to the Trump administration,
Speaker 3: So that's what they always say. But Biden's main pitch,
Speaker 3: and this Bidenomics turn that we're hearing, is that he
Speaker 3: wants to give Americans quote unquote more breathing rooms, and
Speaker 3: he believes that people who have sought a college education
Speaker 3: are deserving of this. But one thing that people criticized
Speaker 3: him for in the original plan is student debt is
Speaker 3: such a huge issue and a systemic issue that this
Speaker 3: plan was only to put out one time forgiveness. It
Speaker 3: was only going to help a very specific group of people.
Speaker 3: It's not going to help people who are in college
Speaker 3: right now or who are going to apply to college,
Speaker 3: And so that is sort of a big question here
Speaker 3: is how are they going to fix this system outside
Speaker 3: of debt cancelation?
Speaker 1: And how are Senator Warren and other progressives on the hill,
Speaker 1: you know, student loan activists, I know the NAACP has
Speaker 1: been very involved in civil rights groups. How are all
Speaker 1: of these disparate groups sort of keeping the pressure on
Speaker 1: the administration to sort of fulfill these promises that they
Speaker 1: want to see.
Speaker 3: Well, they want this plan to be completed as quickly
Speaker 3: as possible. They know that there's limits in the negotiated
Speaker 3: rulemaking process for it to be shorter, but they're sort
Speaker 3: of putting the pressure on for it to be done
Speaker 3: as quick as possible because they know that this is
Speaker 3: in jeopardy, say if a Republican gets in office come
Speaker 3: next year. And that's why I think this could be
Speaker 3: again a twenty twenty four election issue, because if Biden
Speaker 3: could stay in office, he could continue a legal fight
Speaker 3: if one come next year. But if he leaves this profom,
Speaker 3: we'll completely be throdded and we'll be back to square.
Speaker 1: One when we come back. More with White House Correspondent
Speaker 1: Akayla Gardner on what's next for student debt forgiveness. Where
Speaker 1: do you see student loan cancelation having sort of the
Speaker 1: biggest political impact in twenty twenty four. Do you see
Speaker 1: it sort of in how Biden's going to use in
Speaker 1: the campaign. Do you see it playing a key role
Speaker 1: in their message in certain states.
Speaker 3: It's a great question because if you look at polling,
Speaker 3: student debt cancelation is pretty split. It's pretty divided amongst
Speaker 3: the elector at large, but under very specific groups it's
Speaker 3: very popular. So if you look at young folks, so
Speaker 3: there was a poll by Voters of Tomorrow that showed
Speaker 3: this has the most awareness or popularity amongst young people.
Speaker 3: More young people knew of this plan than anything else
Speaker 3: that Biden has done during his first two years in office.
Speaker 3: And then if you look at people of color, so
Speaker 3: Black voters, Latino voters, they're way more likely to be
Speaker 3: in favor of student debt cancelation. I saw one poll
Speaker 3: that said seventy percent of Black voters and ninety five
Speaker 3: percent of Latino voters are in favor of all or
Speaker 3: some debt cancelation. So yes, there's like very specific groups
Speaker 3: that he's very aware that these are popular issues, and
Speaker 3: I think we've seen him in those settings when he's
Speaker 3: talking to an audience that is predominantly black folks or
Speaker 3: protominate Latino folks. He knows to raise this, but this
Speaker 3: is not something that I think we see him talk
Speaker 3: about regularly all the time on the campaign trail, but
Speaker 3: he knows when it's important to certain groups to bring
Speaker 3: it up.
Speaker 1: It did take a while for President Biden to come
Speaker 1: around on the issue of student loan cancelation. It was
Speaker 1: not something that he intended to do when he was
Speaker 1: running for president in twenty twenty. He seems to have
Speaker 1: embraced it. Now do you think he's all Anna, Kayla.
Speaker 3: It's such a good question, because I feel like the
Speaker 3: issue of student at cancelation or free college was such
Speaker 3: like a fringe issue, especially when you go back to
Speaker 3: twenty sixteen. Bernie Sanders was really the only candidate that
Speaker 3: was fully embracing this idea. And Joe Biden has always
Speaker 3: been or sold himself as like a moderate, the centrist
Speaker 3: guy who's able to reach across the aisle. So it
Speaker 3: was a big deal for him to embrace it. And
Speaker 3: I think it was a recognition that the center of
Speaker 3: the party has sort of shifted, like the fact that
Speaker 3: he has embraced it, and I'm sure it had a
Speaker 3: lot to do with polling, like they probably saw that
Speaker 3: this is a popular issue, this is gonna galvanize key
Speaker 3: parts of the Democratic base. But I think he has
Speaker 3: sort of embraced it now and he sort of has
Speaker 3: to keep going. I don't know if internally Joe Biden
Speaker 3: is the biggest fan of it, because he's also like
Speaker 3: the labor guy, and he's also making this huge pitch
Speaker 3: to folks who are in the trade industry. At the
Speaker 3: same time, he's still trying to be everybody's Joe Biden.
Speaker 3: I think he has recognized that it's politically popular, that
Speaker 3: it was a good idea for him to embrace on
Speaker 3: the campaign trail. But we saw him take twenty months
Speaker 3: to release this plan, and I think that was also
Speaker 3: very politically strategic. He waited for his key legislative bills,
Speaker 3: IRA American Rescue Plan, all of those things that could
Speaker 3: have upset key moderates like Joe Manchin. He waited for
Speaker 3: all those things to be accomplished before he rolled this
Speaker 3: out just weeks before the midterms. So I think that
Speaker 3: was definitely a signal that he did embrace on the
Speaker 3: campaign trail, but he was also aware that it was
Speaker 3: politically thorny, especially to get some of his major priorities done.
Speaker 1: Thank you so much for joining us, a Kayla, Thanks.
Speaker 3: So much, Nancy, So glad we got to do this.
Speaker 1: Thanks for listening to us here at the Big Take,
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Speaker 1: Our supervising producer is Vicky Vergalina. Our senior producer is
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Speaker 1: Special thanks to Bloomberg Personal Finance reporter Claire Ballantine and
Speaker 1: Augusta Sariva for contributing their data and sources to this episode. Raphael,
Speaker 1: I'm see Lee is our engineer. Our original music is
Speaker 1: by Leo Sidrin. I'm Nancy Cook, and we'll be back
Speaker 1: on Monday with another Big Take. Have a great weekend.
Speaker 2: I'm