President Joe Biden (Photo by ROBYN BECK/AFP via Getty Images)
This story is developing.
President Joe Biden says he won’t forgive $50,000 of student loans.
Here’s what you need to know.
Student Loans
At a CNN town hall tonight in Milwaukee, Wisconsin, an audience member said there should be $50,000 of student loan debt cancellation for borrowers, not $10,000 of student loans, as Biden has proposed. When the audience member asked the president what he will do to cancel $50,000 of student loans, Biden responded: “I will not make that happen.”
Biden’s position tonight is clear that the president won’t act unilaterally to cancel student loan debt. Biden’s direct response — and rejection of a Democratic proposal in Congress to cancel up to $50,000 in student loan debt for borrowers — is not a surprise. For months, Biden has been consistent in his position that he wants Congress to cancel student loans immediately. Biden believes that Congress, not the president through executive action, is the correct branch of government that controls federal spending, which includes any plans for student loan cancellation.
“I don’t think I have the authority to make that happen,” Biden said.
Student loan cancellation
What does this mean for student loan cancellation? Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) want Biden to cancel up to $50,000 of student loans by executive order. They believe that the Higher Education Act of 1965 provides legal authority for the U.S. Secretary of Education to cancel student loans. They reference Section 432(a) of the Higher Education Act, which grants the U.S. Secretary of Education the authority “to modify, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” Based on this provision, they argue that it’s unquestionable that the president (through the Secretary of Education) can cancel student loans for all student loan borrowers.
Democrats in Congress have waged a campaign to pressure the president to cancel student loans through an executive order. Schumer, Warren, Rep. Alexandria Ocasio-Cortez and others have publicly stated that Biden has the authority to cancel student loan debt, and Schumer has said Biden can do it with the “flick of a pen.” The White House says that Biden supports student loan cancellation, and that Biden will consider student loan forgiveness through executive action if he has legal authority.
That said, Biden, Schumer and Warren all want student loan cancellation. However, they differ in the details. For example, substantively, Schumer and Warren want more student loan debt cancelled. Procedurally, they want Biden — not Congress — to cancel student loans. That’s a tall order, given the estimated $650 billion price tag. Traditionally, Congress would pass legislation to spend federal dollars, especially of that magnitude. While the U.S. Secretary of Education has the power to cancel student loan debt due to fraud, total and permanent disability, and other circumstances, it has not been tested in courts whether the Education Secretary has unilateral power without further congressional authorization simply to cancel student loans debt on a widescale basis.
Will you get student loan cancellation?
Increasingly, it’s becoming clear that Biden won’t cancel student loans by executive order. This include $50,000 of student loan cancellation or $10,000 of student loans. Despite ongoing public pressure, Biden confirmed tonight where he stands on student loan cancellation. That means if Democrats in Congress want student loan cancellation, they likely have to pass legislation. To be clear, student loan cancellation is not universally supported in Congress. Republicans won’t support any student loan cancellation. Further, it’s unclear if Democrats have enough votes to pass a student loan bill with student loan forgiveness. This may be why Democrats have hoped Biden would cancel student loan debt. Without a clear path forward, there’s no guarantee that Congress can cancel $10,000 of student loans, or any student loan debt for that matter. Don’t simply hope for student loan cancellation. Make sure you get a student loans game plan. Start with these three options, all of which have no fees:
