1 00:00:02,366 --> 00:00:05,000 GEOFF BENNETT: President Biden announced new plans to cancel student debt for millions of borrowers. 2 00:00:06,033 --> 00:00:08,333 Lisa Desjardins is here with more. 3 00:00:08,333 --> 00:00:12,700 So, Lisa, this is President Biden's broadest attempt at student loan debt forgiveness since 4 00:00:14,833 --> 00:00:16,966 the U.S. Supreme Court struck down his previous effort more than a year ago. Is that right? 5 00:00:16,966 --> 00:00:19,333 LISA DESJARDINS: That's right, Geoff. 6 00:00:19,333 --> 00:00:22,800 The administration did not give final details of their plan today, but they did outline executive 7 00:00:22,800 --> 00:00:27,800 actions that they're teeing up. Those would eliminate at least $20,000 in accrued interest 8 00:00:29,900 --> 00:00:33,600 for those who owe more than their original loan, offer more for those with lower incomes, 9 00:00:35,733 --> 00:00:39,166 cancel remaining debt for anyone who has spent 20 or 25 years, depending on the loan, 10 00:00:39,166 --> 00:00:44,133 repaying their loans, and void loans from college programs that were proven to be deceptive. 11 00:00:45,200 --> 00:00:47,466 Biden spoke about the move today. 12 00:00:47,466 --> 00:00:49,500 JOE BIDEN, President of the United States: By freeing millions of Americans from this 13 00:00:49,500 --> 00:00:53,233 crushing debt of student debt, it means they can finally get on with their lives, 14 00:00:53,233 --> 00:00:56,733 instead of being put -- their lives being put on hold. 15 00:00:56,733 --> 00:00:58,666 LISA DESJARDINS: Danielle Douglas-Gabriel covers 16 00:00:58,666 --> 00:01:02,800 the economics of higher education for The Washington Post and joins me now. 17 00:01:02,800 --> 00:01:07,800 Danielle, the White House says some 23 million Americans could be affected by this, and a 18 00:01:10,066 --> 00:01:13,700 financial boost for them. Help us understand, who exactly does the White House think this helps? 19 00:01:15,100 --> 00:01:17,133 DANIELLE DOUGLAS-GABRIEL, The Washington Post: Sure. 20 00:01:17,133 --> 00:01:20,000 So, the vast majority of federal student loan borrowers could see some relief under 21 00:01:20,000 --> 00:01:24,700 this plan. And it's important to note there are many facets to the plan, five categories 22 00:01:24,700 --> 00:01:29,700 of borrowers in total, but perhaps the largest category that could deliver relief is the one 23 00:01:29,700 --> 00:01:34,700 that eliminates up to $20,000 in student loan interest from a borrower's balance. 24 00:01:36,600 --> 00:01:41,266 This is pretty common that borrowers may have borrowed, say, $20,000, but, 25 00:01:41,266 --> 00:01:44,533 because of the way interest accrues on student loans, could owe twice as much 26 00:01:44,533 --> 00:01:47,966 over the lifetime of their loan. So, this proposal would really help those 27 00:01:47,966 --> 00:01:52,133 folks. And the White House is saying about 25 million people will benefit from that part. 28 00:01:52,133 --> 00:01:57,100 But 23 million of that 25 could get their interest completely eliminated under this plan. 29 00:01:58,833 --> 00:02:00,966 LISA DESJARDINS: As you indicate, this is a complex proposal. 30 00:02:00,966 --> 00:02:04,200 And, in part, that's because of the Supreme Court's previous decisions, the Biden 31 00:02:04,200 --> 00:02:09,200 administration trying to put something together that they think can remain legally intact. But 32 00:02:11,266 --> 00:02:14,833 help us understand, with all that complexity, when could this actually go into place? 33 00:02:17,133 --> 00:02:19,100 DANIELLE DOUGLAS-GABRIEL: So what's interesting here is that most of us who have been watching 34 00:02:19,100 --> 00:02:22,066 this law -- and keep in mind that the regulations started to be crafted right 35 00:02:22,066 --> 00:02:26,600 after the Supreme Court struck down Biden's last attempt at this large-scale debt relief. 36 00:02:26,600 --> 00:02:30,633 But we thought, many of us, that the full regulation wouldn't be 37 00:02:30,633 --> 00:02:34,800 implemented until next summer. But the Biden administration has zeroed in on a couple 38 00:02:34,800 --> 00:02:39,500 elements that they could do earlier, most importantly, the interest reduction piece, 39 00:02:39,500 --> 00:02:44,500 which the administration says they could likely push out this fall ahead of the election. 40 00:02:46,400 --> 00:02:48,300 LISA DESJARDINS: We talked about the benefits to many millions of Americans, 41 00:02:48,300 --> 00:02:51,100 but let's also talk about the costs. They too could be substantial. 42 00:02:51,100 --> 00:02:56,066 Now, we know that the Biden administration has boasted that it canceled about $146 43 00:02:57,933 --> 00:03:00,866 billion in loans. That's from previous programs that they implemented. Now, 44 00:03:00,866 --> 00:03:03,900 according to the Committee for a Responsible Federal Budget, 45 00:03:03,900 --> 00:03:08,900 when you add in the pauses in debt relief and other Biden programs that they have put in place, 46 00:03:11,200 --> 00:03:13,700 it's more like $600 billion, by their estimate, that has been spent so far in student debt relief. 47 00:03:13,700 --> 00:03:17,300 And we don't know how much this new program will cost. Some, 48 00:03:17,300 --> 00:03:22,133 like Louisiana Republican Bill Cassidy, have repeatedly argued that this is a 49 00:03:22,133 --> 00:03:27,133 wealth transfer from those who have college degree -- to those who have college degrees. 50 00:03:29,033 --> 00:03:31,333 SEN. BILL CASSIDY (R-LA): Where is the forgiveness for the guy who didn't go to 51 00:03:31,333 --> 00:03:36,333 college, but is working to pay off the loan on the truck he takes to work? What about 52 00:03:38,366 --> 00:03:41,800 the woman who paid off her student loans, but either bought a less expensive home, 53 00:03:43,500 --> 00:03:46,400 but is now -- or is now struggling to afford the mortgage that she has? 54 00:03:46,400 --> 00:03:51,400 Is the administration providing them relief? No, nada. Of course not. 55 00:03:53,200 --> 00:03:54,633 LISA DESJARDINS: Danielle, how does the administration respond to that 56 00:03:54,633 --> 00:03:56,900 idea that this wildly runs up the national debt 57 00:03:56,900 --> 00:04:01,866 to just give a temporary boost to a very select group of Americans? 58 00:04:03,366 --> 00:04:05,533 DANIELLE DOUGLAS-GABRIEL: You know, the administration has 59 00:04:05,533 --> 00:04:08,500 said in the past that the economic benefit of forgiving debt could be tenfold, right? 60 00:04:08,500 --> 00:04:12,633 People are freed up from having to make those payments. They're more likely to 61 00:04:12,633 --> 00:04:16,400 return money to the economy in the forms of purchasing homes, purchasing cars, 62 00:04:16,400 --> 00:04:21,400 spending more in general. I mean, certainly, we did see some boost during the 3.5-year pause of 63 00:04:23,700 --> 00:04:28,300 federal student loans in terms of home purchases before interest rates really started to skyrocket. 64 00:04:28,300 --> 00:04:33,300 And perhaps that certainly could be the case if we were to see broader debt relief. But, 65 00:04:35,100 --> 00:04:38,500 yes, the cost of these programs has been up for debate, as well as the utility, 66 00:04:38,500 --> 00:04:42,133 because it's not beneficial to all American taxpayers. 67 00:04:42,133 --> 00:04:46,500 But I think it's important to note that the vast majority of people who have student 68 00:04:46,500 --> 00:04:51,500 loan debt have debt and no degrees. There are about 40 percent of people, 69 00:04:53,200 --> 00:04:55,433 actually. And so these are people who started but didn't finish, 70 00:04:55,433 --> 00:05:00,466 and they are dealing with this debt, most of whom are struggling with it, and see no way out. 71 00:05:00,466 --> 00:05:03,500 So I think that's really what the president and his administration is trying to get at, 72 00:05:03,500 --> 00:05:07,766 trying to help those people who didn't really get to see the benefit of their education. 73 00:05:07,766 --> 00:05:11,100 LISA DESJARDINS: This, of course, was part of a 2020 Biden election promise, 74 00:05:11,100 --> 00:05:14,500 but we are yet again in a presidential election year. And as you said, 75 00:05:14,500 --> 00:05:17,500 a big chunk of this, they hope to implement before the election. 76 00:05:17,500 --> 00:05:20,800 Can you talk about the politics at play here for the voters that 77 00:05:20,800 --> 00:05:24,033 the Biden administration might be concerned about? 78 00:05:24,033 --> 00:05:26,100 DANIELLE DOUGLAS-GABRIEL: I mean, it's certainly not surprising that 79 00:05:26,100 --> 00:05:30,033 the administration is touting all of the president's accomplishments on student debt, 80 00:05:30,033 --> 00:05:34,000 cleaning up a lot of programs, existing forgiveness programs that weren't operating 81 00:05:34,000 --> 00:05:38,066 well and helping to deliver that $146 billion that you mentioned earlier. 82 00:05:38,066 --> 00:05:42,300 And it's certainly not surprising that they are touting this particular plan. 83 00:05:42,300 --> 00:05:47,066 Many of us who cover this were hoping to see the final rule issued this week. The 84 00:05:47,066 --> 00:05:50,266 Department of Education said it's coming in -- in the coming months, 85 00:05:50,266 --> 00:05:53,600 we will see something. And, of course, there will be public comment on that. 86 00:05:53,600 --> 00:05:58,600 But I suspect -- and I'm not a politics reporter, but I do suspect that as we near the election, 87 00:06:01,000 --> 00:06:04,900 you will see this administration continuing to highlight and uplift the work that they have done 88 00:06:04,900 --> 00:06:09,900 to help borrowers, particularly young borrowers, who are an important part of the coalition. 89 00:06:11,733 --> 00:06:12,666 LISA DESJARDINS: Now let's talk about the future of this in the courts. 90 00:06:12,666 --> 00:06:14,800 As soon as this rule comes out, 91 00:06:14,800 --> 00:06:18,833 do you think there could be an injunction against it filed immediately? Do you think 92 00:06:18,833 --> 00:06:23,633 that this is clear -- clearly on strong legal grounds? What's going to happen? 93 00:06:23,633 --> 00:06:26,466 DANIELLE DOUGLAS-GABRIEL: I mean, certainly, it's on stronger legal grounds, from what 94 00:06:26,466 --> 00:06:30,733 experts are telling me, than the previous rule, because it's backed by a different authority. 95 00:06:30,733 --> 00:06:35,133 The Higher Education Act, which governs pretty much all of higher ed in terms of financial 96 00:06:35,133 --> 00:06:40,133 aid and all of those things, is the anchor for this, whereas the other rule was based on a 9/11 97 00:06:42,233 --> 00:06:45,500 kind of emergency power rule that the Supreme Court didn't really think met the smell test. 98 00:06:47,366 --> 00:06:50,633 So, in this instance, I think it will be a little harder to see an immediate 99 00:06:50,633 --> 00:06:55,266 injunction because this went through a negotiated rulemaking process. The 100 00:06:55,266 --> 00:06:59,800 rule is going to come online next July, regardless of who's in office. There will 101 00:06:59,800 --> 00:07:04,800 likely be challenges. And it's certainly - - if the Trump administration were to win, 102 00:07:04,800 --> 00:07:09,000 they could choose not to enforce the rule. They could also choose to try to rescind the rule. 103 00:07:09,000 --> 00:07:11,733 So that is also a possibility to think about. 104 00:07:11,733 --> 00:07:15,633 LISA DESJARDINS: Danielle Douglas-Gabriel, thank you so much for your reporting on this. 105 00:07:15,633 --> 00:07:20,633 DANIELLE DOUGLAS-GABRIEL: Thank you.