President Biden is butting heads with key Democrats after he rejected Senate Majority Leader Charles E. Schumer’s call to cancel up to $50,000 in debt held by federal student loan borrowers.
Schumer (D-N.Y.) disagrees. On Wednesday, he put out a joint statement with Sen. Elizabeth Warren (D-Mass.) reiterating their belief that the Biden administration could use the same legal authority to cancel debt that President Donald Trump’s administration used last year to temporarily waive interest on federal student loans during the pandemic.
“Canceling $50,000 in federal student loan debt will help close the racial wealth gap, benefit the 40 percent of borrowers who do not have a college degree, and help stimulate the economy,” the pair said. “It’s time to act. We will keep fighting.”
Biden’s comments arrived weeks after White House press secretary Jen Psaki said the administration is reviewing whether the president could issue an executive order to cancel student debt, a commitment Schumer and Warren noted in their statement Wednesday.
Congressional Democrats are urging widespread cancellation without limitations. Biden, however, indicated a reluctance to forgive federal education debt amassed by graduates of elite private universities.
“My daughter went to Tulane University and then got a masters at Penn. She graduated $103,000 in debt,” Biden said Tuesday. “I don’t think anybody should have to pay for that, but I do think you should be able to work it off.”
At a White House briefing Wednesday, Psaki said the president has previously said relief above $10,000 should to be targeted based on the “borrower’s income, the kind of debt in question, public schools vs. private schools, graduate schools vs. undergraduate.”
“There are a lot of considerations at play,” Psaki said. “What the president has told Senators Schumer and Warren is that once his team is in place at the Justice Department … he will ask them to conduct a legal review of his authority … in conjunction with a policy review from his domestic policy council.”
Psaki said Biden hasn’t ruled out the use of executive action but reiterated his support for Congress to take up legislation on debt cancellation.
“If Congress moves forward and sends him a package that provides $10,000 of student debt relief, he’d be eager to sign that,” Psaki said.
Congressional action on debt forgiveness appears unlikely in the near term. Democrats have a slim majority, and Republicans strongly oppose widespread debt forgiveness.
Democrats can use special budgetary rules to advance legislation without Republican support twice this year. The party is taking advantage of the option to pass Biden’s $1.9 trillion rescue package but will have another opportunity later in the year to use the strategy to tackle debt forgiveness.
Yet it remains unclear whether there is enough broad support within the party to use that budget reconciliation to that end. Schumer’s office did not respond to requests for comment on the matter.
Warren has estimated that canceling $50,000 in student debt will cost roughly $640 billion. As the Biden administration urges Congress to invest billions of dollars to help the country emerge from the health and economic crisis, the president signaled an uneasiness about adding blanket forgiveness to the tab and questioned whether there would be a trade-off.
At the CNN town hall, Biden questioned whether it made sense to forgive “billions of dollars in debt for people who have gone top Harvard and Yale … rather than use that money to provide for early education for young children who are — come from disadvantaged circumstances?”
Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Wednesday criticized the president’s position.
“Who cares what school someone went to? Entire generations of working class kids were encouraged to go into more debt under the guise of elitism. This is wrong,” Ocasio-Cortez wrote on Twitter. “Nowhere does it say we must trade-off early childhood education for student loan forgiveness. We can have both.”