This is the first time the administration has publicly signaled a willingness to consider executive action to forgive student loans. Biden said canceling at least $10,000 in education debt would be a part of his economic recovery plan after his election in November. Liberal consumer groups were disappointed when the policy was excluded from the president’s sweeping $1.9 trillion rescue package and pressured him to use his administrative authority.
Biden has previously said he was skeptical about the extent of his authority and backed congressional legislation to cancel $10,000 in education debt.
But congressional Democrats have become unrelenting in urging the president to move on his own.
On Thursday, Senate Majority Leader Charles E. Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.) reintroduced a resolution calling on Biden to provide up to $50,000 in tax-free debt cancellation for all federal student loan borrowers.
“There is very little that the president could do with a flick of a pen that would boost our economy more than canceling $50,000 in student debt,” Schumer told reporters Thursday. “This is one of those things the president can do on his own.”
Liberal lawmakers say the Biden administration could use the same legal authority to cancel debt that Donald Trump’s administration used to temporarily waive interest on federal student loans during the coronavirus pandemic. They estimate that canceling $50,000 in student debt would cost $640 billion.
At a White House briefing before her tweet Thursday afternoon, Psaki reiterated the president’s support for Congress to take up legislation on debt cancellation.
Debt relief, she said, is a priority for Biden, who has directed the Education Department to extend the existing pause on federal student loan payments until Sept. 30.
“He already took a step through an executive action on the first day,” Psaki said, referring to the extension of the student loan moratorium. “He would look to Congress to take the next steps.”
For now, however, congressional action on debt forgiveness appears unlikely. Even though Democrats control both chambers of Congress, they have a slim majority, and Republicans strongly oppose widespread debt cancellation. Democrats are poised to use “budget reconciliation,” a measure that would allow them to pass legislation without Republican votes, for Biden’s rescue package. That package does not include debt cancellation, and congressional aides say lawmakers are not forcing the issue.
Since Congress did not pass a budget resolution last year, Democrats can use reconciliation twice this year, giving them another path toward some form of debt forgiveness before the year’s end. Liberal lawmakers, however, would rather Biden act long before then to lift the burden of education debt from generations of Americans.
“This pandemic has made it all but impossible to ignore that we can and we must take bold action to address the inequities and disparities in our country,” Pressley said Thursday. “Canceling student debt by executive action is one of the most effective ways that we can provide sweeping relief to millions of families, help reduce the racial wealth gap and begin to build the groundwork for an equitable, just, long-term recovery.”
Pressley spearheaded the original resolution in December, but Democrats have been fighting for student debt cancellation to blunt the economic impact of the pandemic since March. The election of Biden, who campaigned on education loan forgiveness, gave liberal lawmakers and advocates hope for a path forward.
An earlier version of this story misstated the potential cost of a plan to cancel $50,000 in student debt per person. It is $640 billion.