White House says one-time loan forgiveness is on sound legal and fiscal footing
US President Joe Biden's decision to forgive a portion of student loan debt for many Americans is on a strong legal and fiscal footing, Bharat Ramamurti, director of the White House National Economic Council, said on Friday.
Biden said on Wednesday he would forgive $20,000 in student loan debt for borrowers who went to college on Pell Grants, and would forgive $10,000 for those who did not receive Pell Grants. The plan applies to those who earn less than $125,000 a year.
Ramamurti emphasized on Friday that this was a one-time measure.
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The plan faced criticism from both Republicans and some Democrats over its potential price tag. And some questioned whether Biden had the legal authority to wipe away the debt unilaterally.
Ramamurti said Biden's move is based on laws passed by Congress and that the White House is on "very strong legal ground."
The White House initially dodged questions about the price tag of the measure but has now estimated that it would cost $24 billion a year for the next decade.
Ramamurti said the White House's initial estimates assume 75% of those eligible for the relief apply for it and cautioned that a more thorough financial review will be undertaken by the Education Department.
