Pelosi, who has largely remained quiet on the issue of debt cancellation, is wading into murky waters.
Progressive Democrats in the House and Senate have been urging Biden to cancel up to $50,000 in debt held by federal student loan borrowers as an act of economic relief. They insist Biden could use the same legal authority President Donald Trump used to temporarily waive interest on federal student loans during the pandemic. But Biden has questioned whether he could make a unilateral decision on any portion of the $1.6 trillion in federal debt held by Americans.
Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.) have been at the forefront of the cancellation campaign, hosting news conferences, including one Tuesday, calling on Biden to take action.
“To make borrowers repay their debts now would be unfair, would be harsh and in many instances would be cruel,” Schumer said Tuesday. “People were thrown off their stride by covid. Give them a chance to recover.”
Schumer and Warren’s offices did not respond to requests for comment on Pelosi’s statements Wednesday.
In a statement, Pressley reiterated that Biden has the authority to take action and “has already used that authority to cancel the debt of students defrauded by for-profit colleges” and “cancel the interest on federal student loans.”
Pressley and other Democrats say debt cancellation is a racial justice issue, given that Black students shoulder a disproportionate share of the debt burden. Opponents of broad-based debt cancellation say the economic benefits would accrue to too many high-income households and question the fairness to taxpayers.
Pelosi raised similar objections Wednesday.
“Suppose your … child just decided at this time they did not want to go to college, but you’re paying taxes to forgive somebody else’s obligations. You may not be happy about that,” Pelosi said.
Activists were incensed by the speaker’s comments.
“She’s absolutely wrong … and misguided,” said Natalia Abrams, executive director of the nonprofit advocacy group Student Debt Crisis. “I don’t how much of an impact she’ll have on Biden, but this has re-energized all of the organizations working in this space to prove her wrong.”
Legal scholars are divided on the extent of Biden’s authority, and the president himself has expressed skepticism. Biden told an audience at a CNN town hall in February he was prepared to write off $10,000 but not $50,000 in student loans because he didn’t believe he had the legal right.
Biden also indicated a reluctance to clear the obligations of people who attended elite institutions, arguing that taxpayers should not be on the hook for their education. Still, he has directed the Justice Department to review his authority and draft a memo on the matter. Biden has not set a timeline, and the White House did not respond to requests for comment.
Activists are concerned that the White House is dragging its feet on the question of cancellation as the end of the student loan payment pause approaches in September. Some suspect the delay signals the White House is not fully on board with debt cancellation.
“I don’t know why they are stalling,” Abrams said. “The only thing I can think, in a good way, is the energy from the 415-plus organizations is so strong that it put Biden in a place where he needs to be very thoughtful about his next steps.”