NAACP slams Biden over reported student loan debt cancellation plan

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Will President Biden cancel student debt ahead of midterm elections?

King's College professor Brian Brenberg explains why canceling student debt would likely be inflationary on "Your World."

The NAACP slammed reports that the Biden administration is planning to cancel $10,000 in student loan debt, calling the plan inadequate to address the $1.75 trillion in student debt held by Americans.

"If the rumors are true, we've got a problem. And tragically, we’ve experienced this so many times before," NAACP President Derrick Johnson said in a statement on Tuesday. "This is not how you treat Black voters who turned out in record numbers and provided 90% of their vote to once again save democracy in 2020."

The Biden administration has been discussing several different plans, including eliminating $10,000 per borrower making less than $125,000 a year, the Wall Street Journal reported Tuesday. Such a plan could cost American taxpayers hundreds of billions of dollars on top of the trillions the Biden administration has already spent, as the national debt has soared more than $30 trillion. An announcement could come as soon as Wednesday.

Activists demonstrate outside an entrance to the White House as they call for the cancellation of student debt on April 27, 2022. (Reuters/Evelyn Hockstein)

The president campaigned on canceling $10,000 in student debt, but the progressive flank of the Democratic Party has been calling for Biden to wipe out at least $50,000 for all borrowers.

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The NAACP has also been pushing for Biden to cancel a "minimum" of $50,000.

"The student debt crisis has a disproportionate impact on Black borrowers and their families," the NAACP said as part of its "$50K & Beyond" campaign. "Across all racial groups, Black borrowers hold the most student loan debt despite also being consistently underserved by postsecondary institutions."

Rep. Ilhan Omar, D-Minn., joins activists in a demonstration outside an entrance to the White House as they call for the cancellation of student debt on April 27, 2022. (Reuters/Evelyn Hockstein)

A study by the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School, estimated that canceling $10,000 per borrower would cost about $300 billion if the policy is limited to individuals with incomes less than $125,000.

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If the president goes the route that progressives and the NAACP want him to and cancels $50,000 per borrower, it would cost the federal government roughly $980 billion, according to the analysis.

Biden is also expected to announce an extension of the federal student loan payment pause before it expires at the end of this month.