Biden said on the campaign trail that if elected, he’d seek to “immediately” wipe out at least $10,000 in student debt for every federal borrower, a move that advocates say is in his authority. But over a year into his presidency, Biden has failed to deliver on that pledge, leaving borrowers like Rob frustrated.
“I know that I’m going to have to start making payments,” Rob, who’s studying to become a teacher and did not want to disclose his full name for privacy reasons, told Insider. “Teachers don’t make a lot, and it’s going to have a big impact on me, already just on my quality of life.”
Indeed, the 34-year-old, along with about 45 million other Americans who took out federal loans for their higher education, will have to resume loan payments on May 1 when the Biden administration’s pandemic pause expires.
“It’s upsetting because you vote for Democrats, and they honestly never really follow through with their promises at all,” Rob said. He owes about $60 payday loans for West Virginia residents,000 in student debt and said he won’t vote in this year’s midterm elections unless the president follows through with $10,000 in cancellation.
“I would be shocked, and I’d be thrilled to go to the voting booth if they do do it,” he added. “But right now they need to earn my vote, and right now they’re not doing it.”
The White House has been slow to take sweeping measures on student-debt cancellation as Biden questions his legal ability to do so and punts the responsibility to Congress. In the meantime, the student-loan companies that process the record-breaking $1.7 trillion debt have poured money into lobbying and politicians’ war chests to oppose broad cancellation – spending that could provide some clarity on Biden’s inaction.
Recent Democratic-led efforts to stanch the flow of money into politics have tanked. Yet despite spending and lobbying, experts say there is a glimmer of hope for advocates fighting for student-debt cancellation to push back.
“This is an interesting sort of David and Goliath battle,” said James Thurber, a political scientist at American University who teaches an ethics and lobbying seminar, “where David is winning on a few things but not over the entire policy change.”
Student-loan companies spend millions to keep their industry alive
Why Biden has not pursued broad student-debt forgiveness is unclear, but the student-loan industry’s wide-reaching influence on politics might shed some light on the administration’s position.
Student-loan companies spent nearly $4.5 million on lobbying efforts last year, according to OpenSecrets, a nonprofit that tracks campaign-finance and lobbying data. The industry lobbied against student-loan payment pauses during the pandemic, along with student-debt issues in Biden’s COVID-19 stimulus package last year. In 2020, the industry spent about $4 million on lobbying.
The federal government hands out contracts to these companies to service student loans to borrowers. In exchange, companies earn fees for each loan they service.
Student-loan companies have spent millions fighting efforts like Biden’s $10,000 debt-cancellation pledge, and so far they’re winning
Navient, previously one of the largest federal student-loan servicers, spent nearly $1.7 million on lobbying last year and earned $717 million in profits. (Mired in decades of controversies and allegations of misleading borrowers, Navient received approval from the Education Department in October to shut down its federal-loan services at the end of last year. The company has consistently denied wrongdoing but recently reached a settlement with 39 attorneys general over accusations of abusive practices.)
Another major student loan company, Nelnet, spent $230,000 on lobbying in 2020. That same year, Nelnet made over $352 million in profits. Nelnet did not return Insider’s request for comment.
