President elect Joe biden approved the writing off of some student loan debts “immediately” upon entering the White House, but faces increasing pressure from progressive lawmakers to pursue the matter further.
When asked on Monday whether the cancellation of student loan debt was factored into his plans for the economy and would he consider issuing an executive order on the matter, Biden reiterated his support for a provision in the HEROES law, which the Democratic-controlled House passed earlier this year.
Under this legislation, in economic difficulty borrowers would immediately have $ 10,000 in canceled student debt. The government would also cover monthly loan payments for people with private student loans until September 2021 and write off $ 10,000 of their debt.
“An immediate $ 10,000 student loan forgiveness, helping struggling people out there,” Biden said. “They have to make choices between paying their student loan and paying the rent. Those kinds of decisions.
A Biden official later told Fox News that the former vice president does not want to issue an executive order and instead wants Congress to legislate on the matter.
But some Democrats and progressives in the Senate are pushing for more debt relief: Senators Chuck Schumer of New York and Elizabeth Warren of Massachusetts both called on Biden to unilaterally cancel up to $ 50,000 in outstanding federal student loans per borrower.
“Biden-Harris can write off billions of dollars in student loan debt, giving tens of millions of Americans an immediate financial boost and helping close the racial wealth gap,” Warren tweeted last week, referring to both the new Managing Director and the Vice President. elect Kamala Harris. “It is the most effective executive action available for massive economic stimulus.”
Warren said Biden could use existing executive power under the Higher Education Act to order the Department of Education to write off student loan debt. Previous estimates show that the proposal would offer a full discount to over 75% of borrowers and a partial discount to over 95%.
“The student loan cancellation is good, actually,” Representative Alexandria Ocasio-Cortez tweeted on Monday. “We should also be pushing for tuition-free public colleges to prevent this huge debt bubble from financially decimating people in every generation. It is one of the easiest progressive policies to ‘pay for’, with several avenues ranging from a Wall St transaction tax to an ultra-wealth tax to cover it. “
Ocasio-Cortez, the progressive and Democratic spearhead of New York City, was not the only one pressuring Biden to eliminate all student loan debt.
“With the stroke of a pen, the new administration can do more to close the racial wealth gap than any other in modern history,” Nina Turner, former Ohio senator and co-chair of Senator Bernie’s 2020 campaign Sanders, tweeted. “How? By canceling student debt. EVERYTHING (REMINDER, black women are disproportionately overburdened by the student debt crisis).”
This sentiment was echoed by Robert Reich, who served as Secretary of Labor under former President Bill Clinton.
Such drastic executive action would almost certainly face a legal challenge, and it is not known whether it could survive. Critics have argued that the use of such power goes beyond the president’s authority granted by Congress. Canceling student loan debt would also increase the country’s already booming national deficit, which totaled a record $ 3.1 trillion in fiscal 2020.
Student debt outstanding has doubled over the past decade, reaching nearly $ 1.7 trillion. About one in six American adults owe money on federal student loan debt, which is the largest amount of non-mortgage debt in the United States. It has been cited as a major obstacle to the “economic life” of the people by Federal Reserve Chairman Jerome Powell.
Biden’s ability to follow through on his agenda, including student debt relief, could be severely curtailed if the GOP retains control of the Senate, a battle that hinges on two second-round races in January in Georgia.
Democrats would have to win both races to get a 50-50 tie; in this scenario, Harris as vice president could vote to advance the Democratic agenda.