President Biden on Student Loan Forgiveness Transcript

President Joe Biden: (00:00)
Good afternoon. When America made 12 years of public education universal in the last century, we became not figuratively, literally the best educated public in the world and better prepared than any other nation. And I would argue that it’s one of the reasons why we were so successful and had been so successful. But as you’ve all observed, other nations have caught up. In the 21st century, in my view, I think the vast majority of the Americans, 12 years of universal education is not enough and that we’re going to be out competed by the rest of the world if we don’t take action. But here’s the deal. The cost of education beyond high school has gone up significantly. The total cost to attend a public four year university has tripled, nearly tripled in 40 years, tripled. Instead of properly funding public colleges, many states have cut back their support.

We’re just talking about that in the Oval. Many states have cut back support for their state universities, leaving students to pick up more of the tab. And 50 years, for 50 years, Pell Grants had been a key way for the federal government to help lower income families, particularly those earning less than $60,000 a year, to send their kids to college. Those Pell Grants used to cover 80%, 80% of the cost of going to a public four year college. Today, Pell Grants cover roughly 32%. That’s one-third of the cost, as opposed to before. It matters. I remember walking up and now my dad, like probably a lot of year folks, cared a lot about your education. My dad’s greatest regret was that he never got to go to college. And my dad was a very well-read man, particularly history, but it was a great regret.

And he’d always say, “Joey, you’re going to be a college man.” And I’d say, “Dad, but what does that matter? I mean, you can still get fired if you’re a college man.” He says, “Yeah, but they can never take it away from you. They can never take your education away.” And I remember my senior year, I got into one of the little Ivy’s and I got into a number of schools. And we’re trying to get the money, even with financial assistance, to be able to go there. We had four kids, all of us wanting to go to school. And I remember going down after a baseball game. I went to a really good school up in Claymont, Delaware on the Pennsylvania border. And drove down to Newark, Delaware where my dad worked at an automobile agency. And I walked in and I had my spikes. And because the reason I was going down, when your dad works at an automobile agency, the great advantage you get a new car to go to the prom or a good used car.

You think I’m joking. I’m not joking. And so I went down to my 51 Plymouth with beach towels for seat covers. And I had my uniform on, my spikes off. I ran in and the woman’s name was Mary, who ran the place. I said, “Mary, where’s dad?” She said, “He’s out in the lane going into the repair shop.” I’ll give you my word, true story. And my dad was a well dressed, refined fella. And I walked out and my dad was pacing back and forth between the big garage door, going into the repair shop and the door going out of the showroom. And I looked up, he said, “Oh, Joey. Honey, I’m so sorry. I’m so sorry.” I thought God, something happened. This is before cell phones. So I thought something happened to one of my brothers or my sister or my mom or something. I said, “What’s the matter, dad?”

He said, “I went to see –” the guy’s name was Charlie [Deltcher 00:03:54], who was a vice president of the Farmer’s Bank, which was the state owned bank that did a lot of the financing of people wanting to purchase a car. He said, “I went to Charlie and asked to borrow the money.” He said, “He won’t lend it to me.” He said, “I’m so ashamed. I’m so damn ashamed.” My dad was like millions of parents all across the country. Want to help the kids get to school, but there was just no way to be able to do it.

And because he believed, as I do, that education is a ticket to a better life. But something Jill and I, Kamala and Doug, we understand deeply. I’m sure the vast majority of you do as well. But over time, that ticket has become too expensive for too many Americans. All this means is an entire generation is now settled with unsustainable debt in exchange for an attempt at least at a college degree. The burden is so heavy that even if you graduate, you may not have access to middle class life that the college degree once provided. Many people can’t qualify for a mortgage to buy a home because of the debt they continue to carry. They carry is too high and they can’t come up with a down payment anyway. A lot of folks are even putting off starting families because the cost. And the dream of starting and owning your own business is just way off in the distance with the debt that someone are saddled with.

Many of you had to leave school because of financial strain was much too high. About a third of the borrowers have debt, but no degree. And worst of both worlds, debt and no degree. The burden is especially heavy on Black and Hispanic borrowers, who on average have less family wealth to pay for it. They don’t own their homes to borrow against to be able to pay for college. And the pandemic only made things worse. But we responded aggressively to the pandemic to minimize the economic impact of the harm of COVID imposed on individuals, families, and businesses. You all were there. It was recovery. Look, we increased unemployment benefits for workers who were laid off, we provided loans to small businesses so they could stay afloat and take care of their families and their employees. We provided assistance to people to put food on the table.

Remember those long lines, you guys would all film of cars, decent looking car, not jalopies, nice cars, just waiting for a box of food to be put in the trunk. In the United States of America, waiting for over an hour to get food in a trunk. And we provided rent and mortgage assistance to keep people from being evicted and thrown out in the street. Our approach to help Americans who need it the most was necessary. And it was the right thing to do. And it helped people avoid financial crisis, which helped our whole country as a consequence of that. That didn’t benefit them. It benefited the whole economy. Our approach is why America’s economic recovery was faster and stronger than any other advanced nation in the world. Now, it’s time to address the burden of student debt in the same way. Working closely with the sector of education.

He’s got the hard job, Secretary Cardona. Here’s what my administration is going to do to provide more breathing room for people so they have less burdened by student debt. And quite frankly, to fix the system itself, which we came in, we both acknowledged was broken in terms of… anyway. There are three key factors where we’re going to do. First, we’ve made incredible progress advancing America’s economic recovery. We’ve wound down pandemic relief programs like the ones unemployment insurance and small businesses. It’s time we do the same thing for student loans. Student loan payments, pause, is going to end. It’s going to end December 30th. I’m extending it to December 31st, 2022. And it’s going to end at that time. It’s time for the payments to resume. Second, my campaign for president, I made a commitment. I made a commitment that we would provide student debt relief. And I’m honoring that commitment today, using the authority Congress granted the Department of Education, we will forgive $10,000 in outstanding federal student loans.

In addition, students who come from low income families, which allow them to qualify to receive a Pell Grant will have their debt reduced $20,000. Both of these targeted actions are for families who need it the most. Working and middle class people hit especially hard during the pandemic making under $125,000 a year. You make more than that, you don’t qualify. No high income individual or high income household in the top 5% of incomes, by the way, will benefit from this action. Period. In fact, about 90% of the eligible beneficiaries make under $75,000 as a family. Here’s what that means. If you make under $125,000, you get $10,000 knocked off your student debt. If you make under $125,000 a year and you received a Pell Grant, you’ll get an additional $10,000 knocked off that total, for a total of $20,000 relief. 95% of the borrowers can benefit from these actions.

That’s 43 million people. Of the 43 million, over 60% are Pell Grant recipients, that’s 27 million people who will get $20,000 in debt relief. Nearly 45% can have their student debt fully canceled. That’s 20 million people who can start getting on with their lives. All this means people can start to finally crawl out from under that mountain of debt, to get on top of their rent and their utilities, to finally think about buying a home or starting a family or starting a business. And by the way, when this happens, the whole economy is better off. In the coming weeks, the Department of Education will lay out in detail, a short and simple form to apply for this relief. Along with information when this application process opens. By resuming student loan payments, at the same time, as we provide targeted relief, we’re taking an economically responsible course. And as a consequence about $50 billion a year will start coming back into the treasury because the resumption of debt. Independent experts agree that these actions taken together will provide real benefits for families without meaningful effect on inflation.

Let’s be clear. I hear it all the time. How do we pay for it? We pay for it by what we’ve done. Last year, we cut the deficit by more than $350 billion. This year, we’re on track to cut it by more than 1.7 trillion by the end of this fiscal year. The single largest deficit reduction in the single year in the history of America. And the Inflation Reduction Act is going to cut it by another 300 billion over the next decade, because Medicare will be paying less for prescription drugs. And over a trillion dollars we added out for the next two decades. The point is this, there is plenty of deficit reduction to pay for the programs, cumulative deficit to pay for programs many times over. I will never apologize ever helping Americans working… working Americans middle class, especially not to the same folks who voted for a $2 trillion tax cut that mainly benefited the wealthiest Americans and the biggest corporations, that slowed the economy, didn’t do a hell of a lot for economic growth, and wasn’t paid for and racked up this enormous deficit.

Just as we’ve never apologized when the federal government forgave almost every single cent of over $700 billion in loans to hundreds of thousands of small businesses across America during the pandemic. No one complained that those loans caused inflation. A lot of these folks in small businesses are working and middle class families. They needed help. It was the right thing to do. So the outrage over helping working people with student loans, I think is just simply wrong. Dead wrong. Third thing, we’re fixing the student loan program system itself. We’ve talked about this at length. This is really important. We’re proposing to make what’s called an Income Driven Repayment Plan, simple and fair. And here’s how. No one with an undergraduate loan today or in the future, whether for community college or a four year college, will have to pay more than 5% of their discretionary income to repay their loan. That’s income after you pay the necessities like housing, food, and the like.

You currently pay 10%. We’re cutting that in half to 5%. And after you pay your loan for 20 years, your obligation will be fulfilled if it hadn’t already been fulfilled. Meaning, you won’t have to pay anymore. Period. And borrowers whose original balance was less than $12,000, many of whom are community college students, will be done paying just after 10 years. These changes will save more than $1,000 a year in average for the borrower. It’s a game changer. We’re also fixing what’s called, and this has been the bane of driving me crazy when I was out of office, the Public Service Loan Forgiveness Program. Now, this program forgives student loans to encourage those students who had those loans, if they go and do public service. Think of the millions who are public school teachers, local police officers, workers at local charities, members of the military and the national guard. And so many more.

Think of the folks who work for federal, state, local, tribal governments. Keeping essential services going, responding to natural disaster. All those firefighters and cops. The program is designed so that if you serve in one of these jobs, and we’ll be able to list those and you’ll be able to accurately assess whether you do, and make your loan payments for 10 years, even if it’s not consecutive years, your remaining balance will be completely forgiven. It’s a great idea, but the program’s a mess and so inefficient and complicated, too many people just give up. Think if a service member defers their student loan payment while they’re deployed. The system is so restrictive that their active duty service didn’t count as public service and the loan isn’t forgiven as promised. It’s outrageous. Well, the man on my left is going to fix it. The Department of Education has recently proposed changes that will make this program work better and over the long term, much better.

And now the department issues emergency temporary changes to retroactively credit public service, so accounts and loans are forgiven. Since I’ve been in office more than a 175,000 teachers, nurses, police officers have been able to get over $10 billion in loan forgiveness so far through this program. But this opportunity expires on October 31st, 2022. So my message to all servants, all public servants, all those who are the ones that are volunteering, is out with student debt to go. Here’s where you want… if you’re worried about how to do it, go to PSLf.gov before October 31st, to see if you qualify for public service student loan forgiveness. This is another game changer. And we’re going to have people who are there to help get you… help direct you and work you through the process. And one more big change we’re making to the system is we’re holding colleges accountable for jacking up costs without delivering value to students.

We’ve all heard of those schools luring students with a promise of big paychecks when they graduate, only to watch these students be ripped off and left with mountains of debt. And my predecessors looked the other way for some reason, with good reason, to do anything about this fraud. My administration is taking it on. For example, the Department of Education works with private education associations to accredited colleges and universities so they can receive federal aid. Well, last week, the Department of Education fired a college accreditor that allowed colleges like ITT and Corinthian to defraud borrowers. And combined with our emergency actions, the Public Service Forgiveness Program, and other acts we’ve taken, we’ve been able to cancel more than $32 billion in student debt for 1.6 billion borrowers, including those defrauded by these bad acting schools. Our goal is to shine a light on the worst actors, so students can avoid these debt traps.

Now, I understand not everything I’m announcing today is going to make everybody happy. Something is too much. I find it interesting how some of my Republican friends who voted for those tax cuts and others think that we shouldn’t be helping these folks. Something is too little. But I believe my plan is responsible and fair. It focuses the benefit on middle class and working families. It helps both current and future borrowers and it will fix a badly broken system. And these actions build in my administration’s effort to make college more affordable in the first place. It includes unprecedented investments. Nearly six billion in historic black colleges and universities. Much of which is focused on pandemic relief to help students cover tuition and other costs so they can stay in school. And I must be honest with you. I’m going to continue to fight for doubling the Pell Grants.

I didn’t get that done this time. Let me say it again. 12 years of universal education is not enough. I’m going to continue to work for universal pre-K for every three and four-year-old, and universal community college for education beyond high school. Let me close with this. I ran for office to grow the economy from the bottom up, and the middle out. Because when we do that, everybody does better. Everybody does well. The wealthy do very well, the poor have a way up, and the middle class can have breathing room. And that’s going to help America win the economic competition of the 21st century. Because much of my time is spent, how do we remain the most competitive nation in the world, with the strongest economy in the world, with the greatest opportunities in the world? That’s what today’s announcement is about. It’s about opportunity. It’s about giving people a fair shot. It’s about the one word America can be defined by, possibilities. It’s all about providing possibilities. We’re going to have a lot more to say about this. There’s a lot of material that’s going to be put out as to how this is being implemented. And I want to thank you all and God bless you all. Thank you. Thank you. Thank you.

Speaker 2: (20:13)
Mr. President.

Speaker 3: (20:13)
Mr. President.

Speaker 2: (20:14)
How much advanced notice did you have of the FBI’s plan to search Mar-a-Lago?

I didn’t have any advanced notice. None. Zero. Not one single bit. Thank you.

Speaker 4: (20:24)
Mr. President, is this unfair to people who paid their student loans or chose not to take out loans?

Is it fair to people who in fact do not own multi billion dollar businesses to see why these guys get more [inaudible 00:20:39]? Is that fair? What do you think?

President Biden on Student Loan Forgiveness Transcript

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