Joe Biden can cancel student loan debt

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During a press conference last month, Speaker Nancy Pelosi told reporters that the president could not cancel student debt by decree. “People think the President of the United States has the right to forgive debt,” she said, adding, “He has no authority. He can postpone, he can postpone, but he does not have this power … The President cannot do this. It’s not even a discussion. ”

But Pelosi’s statement is at odds with many of her congressional colleagues, who are pressured the president to write off at least $ 50,000 in student debt using executive powers. Supporters of such action are Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren, MP Ayanna Pressly and more than 75 other lawmakers. More than 415 organizations, hundreds of academics and experts, and dozens of attorneys general also provided support. On August 11, a coalition of 80 organizations sent a letter to Speaker Pelosi’s office defending the president’s authority to write off student debt.

The President has broad powers to cancel federal student loan debt under the Higher Education Act. A law passed by Congress in 1965 states that the Secretary of Education can “enforce, pay, compromise, waive or waive any right, title, claim, lien or claim, whether acquired, including any capital or any right of ransom. “Legal experts, including those from Harvard Law School, say the provision allows for enforcement action to overturn federal student debt. And a precedent has already been set.

In March 2020, Donald Trump used the executive branch to suspend all payments and interest on student loans, without objection from legal experts or members of Congress. Later, President Biden twice extended the pause in student loan payments. The right used to suspend payments and interest on student loans is, in effect, a partial cancellation of student debt, and this is the same power that activists and progressive Democrats urge Biden to use to fulfill his campaign promise of canceling loans to borrowers.

In a recent survey conducted by Debt Debt students Crisis and Savi, 60 percent of borrowers said they were not financially secure enough to start paying out before September 2022, or didn’t know when they would be ready, and 75 percent of respondents said that a payment pause has critical to their financial well-being. Recent polls have also shown that the majority of voters are in favor of debt cancellation and have found strong support from both Democrats and Republicans.

Canceling the student loan will also address deep racial inequality, as communities hardest hit by the Covid-19 pandemic also face disproportionate amounts of student debt. Blacks in the United States are twice as likely to die from Covid-19 as whites, and black college graduates owe an average of more than $ 50,000 after a four-year graduation, compared with an average of $ 28,000 for white college graduates. Eliminating student debt will provide a chance to level the playing field for people of color, as well as boost annual GDP to $ 108 billion a year.

Both FedLoan and Granite State, the two largest federal loan servicing operators, recently announced that they will stop servicing federal student loans after December, so more than 10 million people, or roughly one in four borrowers, will need a new loan servicing center. year. With student loan payments due to resume on February 1, the government will have to face the challenge of transferring more than 10 million bills to new service staff within months. It would be easier for the Biden administration to cancel the loans of millions of borrowers who need a transfer.

Cancellation through executive action is the only immediate way to address the student debt problem, as student borrowers can’t wait for a divided Congress to decide on debt cancellation. The urgent need to write off student debt is highlighted by the voices of borrowers across the country. Legal experts have provided clear evidence of the president’s powers to cancel student debt, but Biden’s team is independently investigating the matter. In April, the administration promised to issue a memorandum highlighting the scope of legal authority, but has not yet done so. Extending the pause in student loan payments is a much-needed relief, but writing off bad debt is the only long-term solution brave enough to meet this point. President Biden can – and should – cancel his student debt immediately.



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