In public statements today, President-elect Joe Biden reiterated his support for extensive student loan forgiveness.
Biden said student loan forgiveness “is on my plan” to address the ongoing economic troubles of many Americans. Biden pointed to a bill passed by the House of Representatives that “requires immediate US $ 10,000 waiver of student loans. It stops people. You are in real trouble. They have to choose between paying their student loan or paying their rent – decisions like that. It should be done immediately. “
While Biden urged Congress to pass a bill providing for student loan waiver, he kept to not being obliged to take executive action to waive student debt.
Advocates of student loan borrowers have urged Biden to bypass a divided Congress and take executive action to enact comprehensive student loan waivers. In September, Senator Elizabeth Warren (D-MA) and Senate minority leader Chuck Schumer (D-NY) tabled a Senate resolution calling on the next president to use executive power to cancel student debts.
“America faces historic and intersecting crises during the coronavirus pandemic,” the Senators wrote in a previous article Joint announcement. “Over 40 million Americans are crushed by over $ 1.5 trillion in federal student loan debt. That is typically the hundreds of dollars a month borrowers spend on loan repayments in addition to rent or mortgage payments and other living expenses. With over 9 million defaulted borrowers Student Loans have much higher failure rates than any other type of household debt. This massive student debt burden prevents people from being able to start a small business or buy a house and force students to drop out of school before they graduate. “
Senator Warren and other consumer advocates have drawn attention to a provision in the Higher Education Act that gives the President extensive powers, through the Secretary of Education, to “modify, compromise, remit, or release” student debt. And a coalition of advocacy groups – including the Project on Predatory Student Lending and Student Debt Crisis – has publicly endorsed Warren’s position.
In one way or another, Biden has not said whether he would cancel the student debts through action by the executive, and in particular he has made no commitment in his public statements today. Biden would likely prefer that any student loan waiver measure passed by Congress so that it could cover both state and private student loans (executive measures would likely be limited to state student loans only). In addition, such sweeping executive actions could face legal challenges as critics argue that they could exceed the powers granted by Congress.
In order to avoid direct public comments on the topic, Biden has not finally ruled out executive measures and thus kept them on the table. Biden could potentially continue to urge Congress to take sweeping action against student debt while keeping executive action as an option. This could give his administration a leverage in Congressional negotiations on student debt relief, as well as a backup option in the event that Congress fails to deliver.
Warren and other proponents have called for major student debt relief of $ 50,000; To date, however, Biden has stuck to the smaller $ 10,000 number. Loan waiver of only $ 10,000 would eliminate all student loan debt for an estimated 16.3 million borrowers, or 36 percent of all borrowers, and halve loan balances for an additional 9.3 million (an additional 20 percent of all borrowers). Thus, even a relatively small amount of student debt relief could go a long way.
In addition, Biden has proposed that all borrowers with annual income less than $ 125,000 attending public colleges and universities, as well as historically black colleges and universities (HBCUs) and private minority service institutions (MSIs), waive all student loan debt. But here, too, he has not committed himself to implementing this plan through action by the executive.
Biden has also proposed revising and improving public service lending and canceling the debt of borrowers who have been defrauded by their schools. In his remarks today, Biden noted that the public service loan program “is currently not very well managed”. He promised to initiate a “fundamental change” in the program so that it would be “accessible to all” pursuing a career in the civil service. Biden previously proposed granting borrowers who use public services $ 10,000 a year.
In his remarks today, Biden also drew attention to his plan to provide debt-free college to families with incomes less than $ 125,000 a year.