WILMINGTON, DELAWARE - NOVEMBER 16: U.S. President-elect Joe Biden delivers remarks about the U.S. ... [+]
In public remarks today, President-Elect Joe Biden reaffirmed his support for broad student loan forgiveness.
Biden said that student loan forgiveness “does figure in my plan” to address the ongoing economic issues facing many Americans. Biden pointed to legislation passed by the House that “calls for immediate $10,000 forgiveness of student loans. It’s holding people up. They’re in real trouble. They’re having to make choices between paying their student loan and paying rent — those kinds of decisions. It should be done immediately.”
While calling on Congress to pass a bill that includes student loan forgiveness, Biden stopped short of committing to taking executive action to cancel student debt.
Advocates for student loan borrowers have been pushing Biden to bypass a divided Congress and use executive action to enact broad student loan forgiveness. In September, Senator Elizabeth Warren (D-MA) and Senate Minority Leader Chuck Schumer (D-NY) introduced a resolution in the Senate calling on the next President to use executive authority to cancel student debt.
“America is facing historic and overlapping crises during the coronavirus pandemic,” the Senators wrote in an earlier joint statement. “Over 40 million Americans are being crushed by over $1.5 trillion in federal student loan debt. That’s generally hundreds of dollars each month that borrowers spend paying down loans in addition to rent or mortgage payments and other costs of living. With over 9 million borrowers in default, student loans have much higher rates of delinquency than any other type of household debt. This massive student debt burden is preventing people from being able to start a small business or buy a home, and forcing students to drop out of school before completing their degree.”
Senator Warren and other consumer advocates have pointed to a provision in the Higher Education Act that, they argue, provides broad authority to the President, via the Secretary of Education, to “modify, compromise, waive, or release” student debt. And a coalition of advocacy organizations — including the Project on Predatory Student Lending, and Student Debt Crisis — have publicly supported Warren’s position.
Biden has not stated one way or another whether he would cancel student debt through executive action, and he notably made no commitment in his public remarks today. Biden likely would prefer that any student loan forgiveness measure be passed by Congress, so that it could cover both federal and private student loans (executive action would likely be limited to federal student loans only). In addition, such sweeping executive action could face legal challenges, as critics argue that it could exceed authority granted by Congress.
Nevertheless, in avoiding direct public comments on the topic, Biden has also not definitively ruled out taking executive action, thus keeping it on the table. Biden could potentially continue to push Congress to take broad action on student debt, while retaining executive action as an option. This could provide his administration with leverage in Congressional negotiations on student debt relief, as well as a back-up option if Congress fails to deliver.
Warren and other advocates have called for $50,000 in broad student debt cancellation; but to date, Biden has stuck to the smaller $10,000 figure. Loan forgiveness of just $10,000 would eliminate all student loan debt for an estimated 16.3 million borrowers, or 36 percent of all borrowers, and reduce by half the loan balances for another 9.3 million (an additional 20 percent of all borrowers). Thus even a relatively small amount of student debt cancellation could go a long way.
In addition, Biden has proposed forgiving all undergraduate federal student loan debt for borrowers with annual incomes under $125,000 who attended public colleges and universities, as well as historically black colleges and universities (HBCUs) and private minority-serving institutions (MSIs). But again, he has not made any commitments to enact that plan via executive action.
Biden has also proposed revamping and improving Public Service Loan Forgiveness, and cancelling the debt of borrowers defrauded by their schools. In his remarks today, Biden noted that the Public Service Loan Forgiveness program “is not very well-managed right now.” He promised to initiate a “fundamental change” to the program so that it “is available to everyone” pursuing a public service career. Biden has previously suggested providing $10,000 per year in student loan forgiveness to borrowers who pursue public service.
In today’s remarks, Biden also called additional attention to his plan to provide debt-free college for families making under $125,000 per year.
Further Reading
Could Biden Cancel Some Student Debt Through Executive Action?
