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Published: Apr 29, 2021 9 min read
Collage of a group of graduates walking and President Joe Biden in the background with multiple one dollar bills fading away
Vanessa Garcia / Money; Getty Images; Shutterstock

In his prime-time address to Congress on Wednesday, President Biden laid out a broad vision to boost aid to families, spend on education and reduce inequality. But viewers hoping for a word on student debt relief would have been disappointed. Biden introduced his $1.8 trillion American Families Plan, which includes billions of dollars for universal pre-k, free community college, federal grants for college and paid family leave — but made no mention of student loan cancellation.

Biden campaigned on a couple different ideas to offer student debt relief to many of the nation’s nearly 45 million borrowers. And in the time since he was elected, the calls to forgive student debt have only grown louder, with advocates coalescing around a push for the president to wipe out $50,000 per borrower.

The White House, meanwhile, says the administration is looking into whether a president has the legal authority to cancel student debt without Congress's approval. Still, Biden has previously said he’d prefer to cancel $10,000 worth of federal student loans via legislation.

Which begs the question, then why isn’t debt forgiveness part of his American Families Plan, and for that matter, why wasn’t it included in the pandemic relief bill passed in March either?

The likeliest answers? Politics and money.

The American Families Plan spends the most money on initiatives that are the most broadly popular, says Lanae Erickson, senior vice president for social policy and politics at Third Way, a centrist Democratic think tank.

“The things they chose to put in this plan, everyone from Bernie Sanders to Joe Manchin like,” she says, pointing to two senators on different ends of the Democratic party spectrum.

Universal student loan forgiveness, on the other hand, may have a lot of vocal supporters in Congress and be popular on Twitter, she says. But there are a number of moderate Democrats who aren’t sold on the idea, not to mention the opposition from the Republican side of the aisle.

If the White House were to focus on student loan cancellation and free four-year college in this bill, Erickson thinks Republicans would have jumped at the chance to criticize the plan as elitist. Students attending four-year colleges tend to come from wealthier families than those attending two-year colleges, and people with student debt tend to earn more, because of their college degree, than those without debt.

But by focusing on community colleges and aid for lower-income students (the bill also targets money for support services to colleges that serve more low-income and minority students), the administration has blunted that criticism, she says.

Michelle Miller-Adams, a senior researcher at the W.E. Upjohn Institute in Michigan who just wrote a book on free college, also stressed the many different constituencies that can get behind lowering the cost of community colleges. She pointed toward the leading statewide free community college program in Tennessee, a Republican-led state. And earlier this year, she says, Michigan launched a free community college program for adult workers, despite that fact the Democratic governor and Republican-controlled state legislature agree on little else.

A number of surveys have found that the policy is popular across political parties, and it tends to be very attractive to the business community, which sees it as an opportunity to increase the pool of skilled workers, she says.

The White House is “trying to thread this needle between making good on these progressive promises while also doing things that are politically feasible,” Miller-Adams says.

The White House’s higher education ideas in the American Families Plan aren’t exactly cheap. They include spending $109 billion to make community colleges tuition-free via a federal-state match program that would change the way a part of the higher education system is funded. There's also $80 billion to add up to $1,400 to the maximum size of Pell Grants, the majority of which go to students from families earning less than $40,000.

The total comes out to nearly $300 billion for higher education. But that's still significantly less than what it would cost to wipe out even $10,000 of debt each for all federal borrowers, says Iris Palmer, senior advisor for higher education and workforce in the Education Policy Program at New America, a center-left think tank.

“My sense is that [debt cancellation] is not in there because it’s expensive, and there’s a possibility that it could be done through administrative action,” she says.

The White House could have proposed doubling the Pell Grant, making four-year colleges tuition-free and cancelling student debt, all proposals that Biden has voiced support for. But the plan stays away from all of those more expensive ideas.

“I think there’s a sense that there’s a political constraint there,” she says. “There’s only so much people are going to be willing to spend and tax for.”

The American Families Plan is just a proposal. Think of it as an opening big that lawmakers can (and will) negotiate with. Some parts of it, including raising taxes to pay for the plan, are sure to face stiff opposition from Congressional Republicans. Still, Erickson and Miller-Adams both say they think it’s pretty likely that the higher education proposals, and especially free community college, will come to pass.

What does this mean for the chances of student loan forgiveness?

Miller-Adams says she still expects the Biden administration to work toward its other higher education policies promises, including student debt relief.

“This is just what they’re doing now,” she says.

No one knows the timing on when, or even whether, student loan cancellation might happen. Advocates for cancellation were urging action in Biden's first 100 days, which didn't happen. Now, they are in somewhat of a holding pattern. The White House said at the beginning of April that it had directed the Education Department to draft a memo on the legality of canceling student loans via executive action, and everyone is now waiting for that memo to come.

Cody Hounanian, director of programs at Student Debt Crisis, said the group knew the White House was planning to include college affordability measures in this legislation, and the advocacy group pushed for student debt relief to be a part of that. If it were included, they would feel cancellation was one step closer, he says.

But the group is still pleased with the proposals in the plan, which Hounanian said focuses on many other issues that are critical. He isn’t reading too much into the fact that student loan cancellation isn’t included.

“That doesn’t mean it’s off the table,” he says. “It’s just not in this discussion right now.”

He also pointed out that while Biden has said he’d prefer to work with Congress to pass student debt relief via legislation, he’s also said he supported some immediate debt forgiveness for borrowers in light of the economic stresses caused by the pandemic.

“We know that if the president wants to get it done immediately, executive action is the way to do that."

More from Money:

Biden's American Families Plan Comes With a Big Tax Hike. Here's Who Could Pay More

Here's How Many Borrowers Could See Their Student Debt Wiped Out If Biden Cancels $50,000

Left out of Pandemic Relief, Private Student Loan Borrowers Are Still Struggling a Year Later