MICHEL MARTIN, HOST:
Now we want to turn to an issue that affects tens of millions of Americans. We're talking about student loan debt. About 43 million federal borrowers collectively owe about $1.6 trillion. That was a signature issue for a number of Democratic presidential candidates, and Democrats are still debating what to do about it. And this week, during a CNN town hall, a questioner put President Biden on the spot, asking specifically whether he would be in favor of forgiving up to $50,000 of debt per borrower. Here's part of President Biden's response.
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PRESIDENT JOE BIDEN: We should be eliminating interest on the debts that are accumulating, number one. And number two, I'm prepared to write off the $10,000 debt but not 50.
M MARTIN: And the president went on to say he is unsure if he had the authority to forgive so much debt. We wanted to talk more about this. So we've joined now by NPR's Elissa Nadworny, who covers higher ed. Elissa, welcome. Thank you so much for joining us.
ELISSA NADWORNY, BYLINE: You bet.
M MARTIN: Forgive me for asking, putting you on the spot, but do we know? Does the president have this authority or not?
NADWORNY: Well, we have - you know, we have people on both sides that say yes and no. Like, Trump lawyers at the Department of Education, before Biden was sworn in, issued a memo and said, no, this is illegal. Meanwhile, attorneys at Harvard's Project on Predatory Student Lending say, yeah, this is exactly how the law was designed. It has never been tested in court, and the Biden administration has said it is looking into the legal arguments.
M MARTIN: And there are also questions about who would actually benefit from loan forgiveness. And you've done a lot of reporting on this. So I'd like to ask you - who actually has student loan debt in this country? You say that there are misconceptions about just who has that student and who is struggling. So could you just walk us through that?
NADWORNY: So let's start first with who takes out student loans. I spoke to Jalil Bishop. He's a researcher at the University of Pennsylvania. And he really set this up well.
JALIL BISHOP: What we know from research is that those who borrow student loan debt is because they come from household or personal financial situations where they don't have the assets or the income to afford higher education.
NADWORNY: So families with student debt tend to have the least amount of wealth. So that's different from income, which is important. For undergrads, there are limits to how much you can borrow. So bigger debts tend to come for people who went to graduate school. But, really, high debt loads are rare. So just 6% of borrowers owe more than $100,000. The people who are really struggling tend to have debt on the lower side, so less than $10,000. And that's because, often, they didn't finish. So they - you know, they only went for a year or a semester. Black borrowers and students who went to for-profit schools also have higher debt balances and are more likely to default.
M MARTIN: So the - Biden's $10,000 figure doesn't come from nowhere.
M MARTIN: There is a - sort of a targeted population that really would benefit. But how would those debt forgiveness plans target the people who need the help?
NADWORNY: So the $10,000 forgiveness plan would help those who are struggling the most. It would wipe balances of about 30% of borrowers. But $50,000 in forgiveness would clear debts for about 80% of borrowers, including more Black borrowers. Proponents argue that that would close wealth gaps and get at racial equity.
M MARTIN: So before we let you go - so it's - this is obviously a very complicated issue. It's just not a simple matter of whether people would like to do this or not; it's obviously got a - sort of a deep stem, and there are all kinds of aspects to it. But is this within the realm of possibility?
NADWORNY: I mean, the reality is Biden has repeatedly said that he prefers to tackle student loans through Congress. That's going to take a lot of negotiation. But he's getting a lot of pressure on the Democratic side, more than we've seen in a long time.
M MARTIN: That was NPR's Elissa Nadworny. Thank you, Elissa.
NADWORNY: You bet.
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