Michigan Information & Research Service Inc.
Michigan Information & Research Service Inc.

AG Calls For Full Cancellation Of Federal Student Loan Debt

05/06/22 12:08 PM By John Reurink

Attorney General Dana Nessel is joining seven other AGs in calling on President Joe Biden to cancel federal student loan debt for “every federal student loan borrow in the country,” which amounts to $1.747 trillion in debt.

 

“Hardships created by the pandemic – and the subsequent hold on loan payments – prove we are equipped to cancel student debt once and for all,” Nessel said in a statement Thursday. “I stand with my colleagues in asking President Biden to bring this much-needed relief to millions of borrowers across the country.”

 

In Michigan, an estimated 1.4 million residents owe an average of $36,295 in student debt.

 

Biden is reportedly eyeing a plan to forgive a minimum of $10,000 per borrower, but progressive Democratic lawmakers want that increased to $50,000. The president also has signaled he may extend the Aug. 31 deadline for a pandemic-induced pause on paying student loans that began under the Trump administration.

 

In their letter, the coalition argues that a full cancellation of student debt is necessary to address the sheer enormity of debts owed, systemically flawed repayment and forgiveness systems, and the disproportionate impact of the debt burden on millions of borrowers.

 

The coalition further argues that the cancellation of federal student loan debts will reduce stress and mental fatigue and provide countless opportunities for borrowers, such as saving for retirement and purchasing new homes.

 

Michigan Republican Party communications director Gustavo Portela said such a move would set a "dangerous precedent." He called Nessel's move a "desperate attempt" to try to appeal to Michiganders who have simply struggled under Democrat inflation.

 

"We don't believe canceling every single penny of student debt is responsible," he said. "… This is a clear appeal to Michiganders who have seen her put criminals first and victims last."

 

Portela suggested Democrats concentrate instead on lowering taxes and lowering the burden that Michigan residents have felt "due to Joe Biden's, Dana Nessel's, and Gov. Gretchen WHITMER's inflation problems."

 

The attorneys general say that cancelling federal student loan debt can substantially help close the racial wealth gap.

 

White House Press Secretary Jen Psaki confirmed Tuesday that the White House is also considering tying loan forgiveness to income for borrowers who make less than $125,000 per year.

 

Forbes reported today that the U.S. Department of Education indicated tens of thousands of borrowers will be eligible for "immediate" student loan forgiveness following changes to student loan programs, but implementation questions remained.

 

A December 2021 Morning Consult poll found 60% of Americans support some student debt relief, but that support is split to the degree it should be forgiven. Roughly 30% believe none of the debt should be forgiven while 10% have no opinion.