Democrat Senators Majority Leader Chuck Schumer (NY) and Elizabeth Warren (MA) and Representative Ayanna Pressley (MA) urged President Biden to cancel student loans of up to $50,000. Biden can use his executive authority to help federal student loan borrowers.
Reintroduce A Resolution
Last Thursday, Schumer, Warren, and Pressley reintroduced a resolution that allows the secretary of education to “cancel up to $50,000 in federal student debt.” It also said the President can use “existing legal authorities” under the 1965 Higher Education Act. It also advised Biden to use executive authority under the Internal Revenue Code of 1986. Consequently, this prevents administrative debt cancellation from resulting in tax liability for borrowers.
In addition, the lawmakers encouraged Biden to maintain the pause for student loan payments and interest. They suggested the moratorium should extend until the duration of the COVID-19 pandemic. Around 50 Democratic lawmakers from both chambers joined the resolution on Thursday.
‘Single Most Effective Executive Action’
“Student loan debt is weighing down millions of families in New York and across this country. During a time of historic and overlapping crises, which are disproportionately impacting communities of color, we must do everything in our power to deliver real relief to the American people, lift up our struggling economy and close the racial wealth gap. Democrats are committed to big, bold action, and this resolution to cancel up to $50,000 in federal student loan debt is one of the strongest steps the president can take to achieve these goals,” Schumer said in a statement.
Meanwhile, Senator Warren added that “President Biden can take the single most effective executive action available to provide a massive stimulus to our economy, help narrow the racial wealth gap, and lift this impossible burden off of tens of millions of families” by unilaterally canceling student loan debt. “President Biden has the legal authority to cancel billions in student debt with the stroke of a pen and he must meet the moment by using that authority, which would not only set us on a path to an equitable recovery but would also help reduce the racial wealth gap,” Pressley added.
Moratorium on Student Debt
On his first day in office, Biden signed an executive order holding off student loan payments and interest. This will stay suspended until September 30, 2021. While Schumer said that the president took some good steps, he said Biden needs to go much further. “The bottom line is this is one of those things the President can do on his own,” Schumer said.
During a Thursday briefing, reporters asked press secretary Jen Psaki if the president will support the efforts of congressional Democrats. Psaki said Biden supports canceling $10,000 in debt and calls on Congress to draft proposals. “If it is passed and sent to his desk, he will look forward to signing it,” Psaki said. “Immediate $10,000 forgiveness of student loans, helping people up there in real trouble. They’re having to make choices between paying their student loan and paying the rent. Those kinds of decisions,” Biden said.
Any attempt by Biden to cancel student loans by executive action will face legal challenges from Republicans. Critics argue that using executive authority exceeds the president’s authority as mandated by Congress. In addition, canceling student loan debt will make an added impact on the US’s rising national deficit. As of last year, the deficit is now at $3.1 trillion.
Meanwhile, outstanding student loan debt doubled over the last decade, and now reaching $1.7 trillion. One in six American adults owes money on federal student loan debt, the largest non-mortgage debt in the country. In fact, Federal Reserve chairman Jerome Powell said student loans as a major hindrance in people’s lives.
Watch the CNBC video reporting that Democrats are pushing to cancel $50,000 in student loan debt:
Do you support the Democrats’ proposal to cancel student loans? In addition, will this help Americans crushed by debt amid the pandemic? Let us know what you think about student debt relief. Share your thoughts and comments below.