Progressive Democrats announced a resolution Thursday, Feb. 4 demanding Biden use executive action to cancel $50,000 worth of student loan debt for each borrower. Biden is not expected to pass the measure because his campaign only promised up to $10,000 in congressionally passed debt forgiveness.
Senate Majority Leader Chuck Schumer, Sen. Elizabeth Warren, Rep. Mondaire Jones of New York, Rep. Ayanna Pressley of Massachusetts, Rep. Ilhan Omar of Minnesota and Rep. Alma Adams of North Carolina announced their resolution in a press conference on Thursday. The congressmembers say the Higher Education Act of 1965 gives the President the ability to cancel student loan debt without action or approval from Congress.
Warren said canceling the debt would cost the government about $650 billion, but that it would have economic benefits in the long run. In short, the more money people have, the more they’ll spend.
“Canceling student loan debt is the single most effective executive action that President Biden can take to kickstart this economy.” Warren said at the press conference announcing the resolution. “Canceling student loan debt is good for you, whether you have student loan debt or not, because it is good for our economy.”
Student loan debt — whether federal or private — is an incredible burden for more than 40 million Americans. According to the Federal Reserve Bank of New York, the national student loan debt reached a record high last year, standing at nearly $1.6 trillion. According to Educationdata.org, the average borrower owes $393 per month, with 15% of loan holders being in default at any time.
During his campaign, Biden promised to address student loan debt as a priority. His nominee for education secretary Dr. Miguel Cardona, has also announced cancelling student loan debt as a priority. In his first day in office, Biden extended the pause on federal student loan payments due to the pandemic. But student loan cancellation — especially for an amount as high as $50,000 — is likely to be too radical for his more moderate approach. Biden had previously promised to back a resolution that would cancel up to $10,000 in student loan debt through congressional action and not executive power. He also said in a Washington Post interview last year that he thought it was “pretty questionable” whether the President had the authority to eliminate student loan debt.
White House Press Secretary Jen Psaki tweeted Thursday, saying the administration was “reviewing” the resolution, and that the president would “welcome the opportunity to sign a bill sent to him by Congress,” signaling his wariness to pass such a sweeping measure without congressional approval.
The President continues to support the cancelling of student debt to bring relief to students and families. Our team is reviewing whether there are any steps he can take through executive action and he would welcome the opportunity to sign a bill sent to him by Congress.
— Jen Psaki (@PressSec) February 4, 2021
At the press conference, Omar said progressives might push further, suggesting $50,000 forgiveness may be just the first step in ultimately canceling all student loan debt completely.
Schumer stressed that college should help individuals succeed and not hold them back. DiversityInc has previously reported on student loan debt’s contributions to the racial wealth gap. A 2019 Institute on Assets and Social Policy study found that student loan debt disproportionately affected Black borrowers. Researchers found that 20 years after starting college, the median debt of white borrowing students had reduced by 94%, while the median Black borrowers had 95% still left to pay.
“College should be a ladder up,” Schumer said at the press conference. “For too many people, debt is the anchor that weighs them down, and they rarely overcome it.”