The Big Story: Biden administration unveils student loan relief plan
After months of deliberation, President Joe Biden announced a three-part plan aimed at easing student loan debt, a move that could lower barriers for entrepreneurship in the U.S. The announcement—fulfilling a 2020 campaign promise—will cancel up to $10,000 in federal student debt for many borrowers and up to $20,000 for Pell Grant recipients for those that earn less than $125,000 per year or $250,000 for households. It also includes steps to cap monthly payments, improve the forgiveness programs for borrowers who work in public service, and increase accountability around skyrocketing college costs.
Congressional Democrats and many Americans have long been calling for the Biden administration to address the crippling student loan debt burden, especially as the pandemic swept through the country and millions of Americans faced financial and job uncertainty. And although the administration has repeatedly paused student debt repayments—as well as for a final time this year through December 31—those efforts did nothing to address the looming payments borrowers would eventually have to face.
As Engine has stated in the past, millions of borrowers hold student debt—including entrepreneurs and would-be founders—and the student debt crisis serves as a roadblock on the path to entrepreneurship for many Americans. That’s especially true for underrepresented would-be founders and innovators, who already face higher barriers to launching a startup. For instance, Black women shoulder the most student loan debt, while facing more obstacles including child care burdens, wealth and income inequality, and capital formation barriers, than other groups. Alleviating some of the student loan burden is an important first step in helping Americans pursue entrepreneurship, but student debt will remain an obstacle going forward without action to address the factors that led to the current student debt crisis. Policymakers should take further steps to ensure entrepreneurs are able to innovate without excessive student debt holding them back.
Policy Roundup:
Engine asks PTO to focus on patent quality. Last week Engine—alongside ACT | The App Association and Developers Alliance—filed an amicus brief to the Director of the Patent and Trademark Office as she reviews allegations of misconduct before the agency. This comes amid concerns that prior administration policy was ignoring some meritorious patent review petitions, leaving likely-invalid patents in force. In our brief, we emphasize the need to center patent validity and to craft policies that help the agency receive the information it needs to issue quality patents and clear out invalid ones that stand in the way of startup innovation and competition.
Revised JCPA bill unveiled. A group of lawmakers released a revised version of the Journalism Competition and Preservation Act (JCPA)—a bill that aims to address challenges facing local media organizations by creating an elaborate system to force certain larger tech companies to link to certain news content and pay for those links. While supporting local media is an important goal, critics have raised several concerns, including about the ways the bill would restrict free speech and the exchange of facts and information online and that the bill fails to address the underlying problems facing the news industry.
Biden administration issues final DACA rule. On Wednesday, the Biden administration issued a final rule to protect the Deferred Action for Childhood Arrivals (DACA) program, which has faced an uncertain future following a court ruling which blocked the administration from approving new applications. As Engine, and the startup community have long stated, DACA recipients are overwhelmingly entrepreneurial and fill critical gaps in the U.S. STEM talent pipeline. And immigrant founders play a significant role in the startup ecosystem, with almost 80 percent of unicorn startups having at least one immigrant founder or an immigrant in a leadership position. While we applaud the administration for taking this step, Congress must act to pass legislation to provide a permanent solution for Dreamers and other high-skilled immigration reforms.
Senators encourage SBA to double-down on access to information. On Monday, Sens. Jacky Rosen (D-Nev.) and Roger Wicker (R-Miss.) sent a bipartisan letter to Small Business Administration (SBA) Administrator Isabel Guzman, urging the creation of one centralized, online hub for startup and small business owners to better access information about permitting and licensing. Necessary information for entrepreneurs to successfully scale their businesses is often hard to come by or access—especially for innovators who are from underrepresented communities. We applaud the senators and encourage the SBA to consider more ways to ease the barriers to startup formation and keep inclusivity front of mind.
California’s first privacy law enforcement. This week, the California state Attorney General Rob Bonta announced a settlement in the first public enforcement action of the California Consumer Privacy Act (CCPA). The Attorney General also signaled additional forthcoming enforcement actions, especially as the CCPA’s “notice and cure” system—a 30-day grace period for companies to fix violations of the law to head off liability—ends this year. Bonta also weighed into the debate around a federal privacy law, echoing previous comments that California’s privacy law should not be preempted by any potential federal privacy standard. For startups, however, preemption is a critical feature to any potential federal privacy law because it would help to avoid a patchwork of cumbersome state-by-state privacy rules.
Startup Roundup:
#StartupsEverywhere: Asheville, North Carolina. Edison Marks makes small-and medium-sized enterprise owners more aware of the cybersecurity threats facing their businesses by creating personalized reports and simplifying the issue. Co-Founder and CEO Jeremiah Smith spoke to us about his company, his experience with the Small Business Association (SBA) and the Small Business Technology Council (SBTC), and what he thinks policymakers should consider when thinking about cybersecurity.
