Biden is actively considering canceling student loan debt of up to $ 50,000
The Biden administration said Thursday that the president is actively considering enacting a blanket cancellation of student loans of up to $ 50,000. But no decision has yet been made.
At a Politico Playbook event Thursday, White House Chief of Staff Ron Klain said Biden had asked new Education Secretary Miguel Cardona to write a memo outlining potential legal authorities that would allow him to enact a student loan cancellation of up to $ 50,000.
Separately, President Biden also last month asked the Justice Department to assess its power to enact a blanket student loan cancellation.
Student loan borrower activists, rights organizations and Democratic lawmakers have been mounting a campaign of continuous pressure for months to convince President Biden to write off student debt through management action. Earlier this year, Representative Ayanna Pressley (D-MA), along with several other progressive House Democrats, introduced a resolution calling on Biden to write off $ 50,000 in federal student loan debt for every borrower using executive power. “Large-scale student debt cancellation is precisely the type of bold, high-impact policy that the broad and diverse coalition that elected Joe Biden and Kamala Harris expects to implement,” said declared Pressley said in a previous statement.
Pressley’s House resolution mirrored a similar resolution brought to the Senate by Senator Elizabeth Warren (D-MA) and now Senate Majority Leader Chuck Schumer (D-NY) last September. Warren and Schumer also asked Biden to write off $ 50,000 in student loan debt for each borrower, and they have continued to pressure Biden on that number since then. The Senate resolution was supported by a diverse coalition of more than 200 civil rights organizations and consumer protection groups. “[Student loan debt] is a huge anchor for our entire economy, “Senator Schumer said when unveiling the resolution, saying there are few more powerful economic tools available to President Biden” than the cancellation of $ 50,000 in student debt. It would be a huge boost for our economy. ”
Biden has expressed support for a broad student loan cancellation, but has repeatedly stated that he would rather Congress pass student debt cancellation through legislation, rather than act unilaterally through an executive order. This could prove difficult, however, as it’s unclear whether a majority of Democrats in the House or Senate would approve such a move, or whether Senate Democrats would be able to avoid or overcome an expected filibuster. Republicans in the Senate.
While many student loan legal experts have argued that Biden has the power to enact a blanket student loan cancellation through executive action, Department of Education attorneys under former Secretary DeVos came to the opposite conclusion, and Biden expressed deep uncertainty about the use of executive power to cancel student debt. The president has said on several occasions that he will support a $ 10,000 student loan forgiveness for borrowers. While he has not expressed complete opposition to more ambitious student loan forgiveness proposals, he indicated earlier this year that it would be “unlikely” to support a figure of $ 50,000.
Nonetheless, Biden appears to be actively considering his options. In the meantime, he has taken several preliminary steps to address the student debt problem. On his first day in office, he signed an executive order extending the moratorium on most federal student loan payments and interest until September 30, 2021. Subsequently, Biden enacted his new stimulus package, which will be exempt student loan cancellation and forgiveness from tax under federal law until the end of 2025. Some Democrats in Congress have celebrated this provision as “paving the way” for Biden to cancel student debt.
Last week, Secretary Cardona announced a policy change to the borrower’s repayment defense program that will result in student loan forgiveness for 72,000 student borrowers; the total amount of student debt that is canceled may exceed $ 1 billion. Also last week, Cardona also released new guidelines to colleges and universities that will allow them to use the stimulus funds to cancel institutional student debt in certain situations.
Earlier this week, Biden announced that he would be extend temporary student loan relief for borrowers with past due FFEL student loans, and alleviate the bureaucratic requirements for disabled student loan borrowers who are eligible for student loan forgiveness.
Supporters have praised the administration’s recent initiatives in measured terms, but urged Biden to go much further. The announcement of additional student loan relief earlier this week “only demonstrates the failure of Department of Education programs designed to provide relief to vulnerable borrowers and the need for widespread student debt cancellation,” said said Persis Yu of the National Consumer Law Center in a precedent. declaration.
There is no clear timeline on when President Biden will decide whether to enact a blanket student loan cancellation. “He hasn’t made a decision on this anyway,” Klain said Thursday. “And, in fact, he has yet to receive the grades he needs to start focusing on this decision.”