Management at major student loan company Nelnet expects $10,000 in relief for federal borrowers.
The Lincoln Journal Star reported that its CEO still thinks relief won’t solve higher education costs.
Biden is closing in on a decision on broad student loan relief that could be income-capped.
Even the management of one of the largest student loan companies thinks relief for federal borrowers is on the horizon.
“The likelihood is pretty high” that President Joe Biden will write off $10,000 in student debt for federal borrowers, Jacque Mosely, director of government relations at student loan company Nelnet, said at the company’s annual meeting. last week, when reported by the Lincoln Journal Star.
Jeff Noordhoek, CEO of the company, called the $1.7 trillion in student debt in the country “too big”. But, as the Journal Star reported, Noordhoek said forgiving that debt would not solve the rising costs of higher education because people would continue to borrow after the fact. Jim Kruger, Nelnet’s chief financial officer, said writing off $10,000 of debt for each federal borrower would reduce the company’s future cash flow by $1.8 billion to $1.2 billion.
Nelnet did not immediately respond to Insider’s request for comment.
President Joe Biden is move towards a decision on student loan relief, and several reports have suggested the relief will come close to his $10,000 debt cancellation campaign promise and potentially targeted at those who make less than $125,000 a year. With the pandemic pause in student loan payments expected to expire after August 31, the administration has made it clear that a relief announcement will be made before then, and borrowers are waiting to hear if they will see reductions in their debt balances.
With news of relief on the horizon, Nelnet wasn’t the only company to speak out on possible debt forgiveness. In March, the CEO of SoFi – one of the largest student loan refinance companies in the country – Anthony Noto wrote that Biden had continued to “trivialize” over potential student loan relief. He recommended Biden fulfill his campaign promise to cancel $10,000 in student debt, target pausing payments only for those in “severe hardship,” and put “wealthy and able” borrowers back in repayment when payments were to resume on May 1. .
Following the extension of the payment pause until August 31, SoFi later updated his forecast for 2022 to note that he assumed payments would not resume in 2022.
Insider before reported on lobbying by student loan companies that could block Biden from providing broad relief to federal borrowers. Nelnet, for example, spent $230,000 on lobbying in 2020 and earned more $352 million in profitsand all of the student loan companies spent nearly $4.5 million on lobbying efforts last year, OpenSecrets said.
Despite lobbying and repel Republican lawmakers, who have argued that canceling student debt would exacerbate inflation and cost taxpayers, it is increasingly likely that some type of blanket relief will be implemented. The question now is how much relief, and Democrats want to make sure Biden goes big and doesn’t skimp on his executive authority.
“To close the racial wealth gap and advance a fair and equitable economic recovery for all, we need to ease the burden of student debt,” said Joyce Beatty, chair of the Congressional Black Caucus, said in a recent statement. “Nothing is on the table except inaction.”
Do you have a story to share on student debt? Contact Ayelet Sheffey at [email protected]
Read the original article at Business Intern