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This is a question for centuries: who has the power to cancel student loan debt?
According to Nancy Pelosi, this is not President Joe Biden. This is Congress.
During a press conference on Wednesday, House Speaker Nancy Pelosi, California, made it clear that Biden “has no [the] power “to provide wide distribution student loan forgiveness.
“The president cannot do this, so this is not even a discussion,” Pelosi said… “Not everyone understands this, but the president can only postpone, postpone – but not forgive.”
Pelosi says Congress, not the president, can cancel student loan debt
Pelosi’s statement is an unexpected departure from what her party members have insisted since Biden took office: that Biden canceled $ 50,000 from student loan debt to one borrower as soon as possible.
The pandemic has exacerbated this push. The termination of the federal student loan, which went into effect in March 2020 when Covid-19 began to spread widely in the US, is fast approaching September 30. On Tuesday, Democratic MPs Elizabeth Warren, Chuck Schumer and Ayanna Pressly made a public push for Biden to extend the current federal student loan deferral and cancel the student loan debt.
“We also continue to urge President Biden to use his legal authority to write off student debt of up to $ 50,000,” Schumer said. “This pause really showed how important student debt cancellation is for borrowers and for our economy.”
Biden supported cancellation of student loan debt in the amount of $ 10,000 on the borrower, but from the moment he took office, he remained silent on this matter. And while Democrats are fighting to write off student loan debt, the question of whether the president can legally provide it remains controversial.
According to the Politifact, a non-partisan fact-checking website, pundits disagree over whether the president can enact widespread cancellation of student loan debt under the executive order. There is also a risk that if Biden went for it, he would face legal problems – and it is unclear if this order will survive them.
Pelosi changes the conversation by stating that canceling the student loan should be “an act of Congress.” She also questioned the logistics of how the cancellation would take place and how it could be “fairly dealt with” by taxpayers who have no college debt and would not benefit from the cancellation.
Regardless of whether or not a student loan is written off and who can do it, September 30 comes quickly and there is evidence that borrowers are not ready to renew their monthly payments.
A Spring Survey conducted by research firm SSRS on behalf of Pew Charitable Trusts found that two thirds (67%) of borrowers said it would be difficult for them to pay if they renew next month.
It is unclear at this point whether Biden will extend the grace period for the federal student loan.