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AP: Biden Says He Is “Unlikely” To Cancel $50,000 In Student Loan Debt By Executive Order

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Thursday, December 24, 2020
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Dec 23, 2020,07:57pm EST

Adam S. Minsky, Esq.Senior ContributorPersonal FinanceI’m an attorney focused on helping student loan borrowers.

President-Elect Biden Delivers Remarks In Wilmington, Delaware Prior To Holiday Break
WILMINGTON, DE – DECEMBER 22: President-elect Joe Biden speaks prior to the holiday at the Queen … [+] GETTY IMAGES

Biden made his first public comments today in response to an ongoing campaign by progressive Democrats and consumer advocates to convince the President-Elect to enact sweeping student loan forgiveness.

Speaking candidly to The Washington Post and others in the media about the challenges he will face in January and the limitations of his executive power, Biden said, “I’m going to get in trouble for saying this . . . it’s arguable that the president may have the executive power to forgive up to $50,000 in student debt… Well, I think that’s pretty questionable. I’m unsure of that. I’d be unlikely to do that.”

Earlier in the day, Biden had reaffirmed his general support for broad student loan forgiveness, but suggested that he would support a smaller amount of $10,000.

Last week, Rep. Ayanna Pressley and other House Democrats introduced a resolution calling on Biden to cancel $50,000 in federal student loan debt for every borrower using executive authority. Senate Democrats, led by Senators Elizabeth Warren and Chuck Schumer, had introduced a similar resolution earlier in the year.

PROMOTED

A diverse coalition of 237 civil rights and consumer protection organizations, including the NAACP and several national labor unions, sent a letter to Biden in November, urging him to use executive authority to cancel federal student debt when he assumes office in January.

“President-Elect Biden can— and should— cancel student debt on Day One of his presidency,” said Ashley Harrington, federal advocacy director and senior counsel at the Center for Responsible Lending, at the time.MORE FOR YOU10 Questions About Biden’s Plan To Cancel Student LoansTrump May Reduce Student Loan Debt And TaxesStudent Loans Dropped From New Stimulus Package?

The organizations, and several Democrats in Congress, have argued that the Higher Education Act provides the President with broad authority release borrowers from their student loans. Some student loan legal experts have argued that using this provision to cancel student loan debt is legally sound. But others have expressed concern that such executive action could face serious legal challenges as an overreach of executive authority.

Forgiving $10,000 in student loans would eliminate all outstanding student loans for over 16 million people, or a third of all current student loan borrowers. That level of student loan forgiveness would also reduce the balances of another 9.3 million people by half. Ultimately, over 50% of outstanding student loan borrowers could see significant relief with just $10,000 in student debt cancellation.

Nevertheless, Biden’s comments will disappoint Warren and other consumer rights advocates who have been pushing for broader student loan relief. Warren had also proposed $50,000 in broad student loan forgiveness during her own presidential run, and noted that this level of student debt cancellation could significantly benefit nearly 95% of borrowers.

Student borrower advocacy organizations are not giving up and believe Biden is still persuadable, particularly in light of the recent announcement of his nominee for Secretary of Education, Miguel Cardona.

“We know that hope is not enough,” said Natalia Abrams, executive director of Student Debt Crisis, earlier today. “We will work tirelessly to ensure that Secretary Cardona uses his power and legal authority to cancel student debt on Day One.”

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