‘Cancel It, Don’t Means Test It!’ Omar Says of Student Debt

Congresswoman Ilhan Omar on Monday echoed recent criticism of the Biden administration’s secretive attempts to limit student debt cancellation based on income and instead called for full loan forgiveness for federal borrowers.

“Cancel it, don’t means test it!” tweeted the Minnesota Democrat, pointing to Politico reporting from Friday.

Politico reported that implementing a debt relief program that involves means testing would be a “nightmare” because the U.S. Department of Education (DOE) lacks income information for most of the 45 million federal borrowers:

The Internal Revenue Service has relied on Americans’ prior-year tax information to dole out benefits tied to income, such as stimulus checks and Democrats’ expanded Child Tax Credit payments. The Education Department, by contrast, does not have access to that trove of income data. Federal law tightly restricts how the IRS can share taxpayer information with other agencies.

The result, Education Department officials have concluded, is that the agency is unable to cancel federal student loans based on a borrower’s income level without requiring some action from the borrower. Department officials have told the White House they would need to set up some sort of application process to determine whether borrowers qualify for relief, according to the people familiar with the discussions.

That added layer of bureaucracy would likely take longer for the Education Department to implement compared with across-the-board forgiveness, and it would mean that borrowers would miss out on the benefit if they don’t know to sign up or apply for it.

David Dayen warned in The American Prospect earlier this month that “we have a severe problem with how we finance higher education. If the program that tries to finally spur the political class to action on fixing it ends up a failure, the problem will just metastasize. Those are the stakes for getting student debt relief wrong. And means testing is a perfect way to do that.”

In response to recent reporting that Biden was weighing means testing, the Debt Collective argued in a petition that “student loan debt is already means-tested by design: The rich have no student debt. And the government’s ongoing issues with their failing relief programs show those don’t work, either. We need to cancel all student loan debt.”

“The average federal student loan debt balance is $37,014,” said Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus. “Canceling student loan debt will provide a lifeline to millions of Americans, lifting this crushing weight. It’s time to cancel federal student loan debt.”

Rep. Ro Khanna (D-Calif.) highlighted that about 40% of people with student debt don’t have their college diploma and declared that “canceling student debt is about helping the working and middle class.”

Both Khanna and Barbara Lee (D-Calif.) pointed out that the vast majority of people with student loan debt didn’t go to Ivy League Schools. Lee asserted that “canceling student loan debt is not a windfall for the rich. It’s a lifeline for working Americans.”

Originally published at Commondreams.org, written by Jessica Corbett.