Speakero of the House Nancy Pelosi (Photo by Chip Somodevilla/Getty Images)
This story is developing.
The Speaker of the House has spoken: President Joe Biden doesn’t have the power to cancel student loans.
Here’s what you need to know.
Student Loans
Speaker of the House Nancy Pelosi (D-CA) confirmed today her perspectives on student loan cancellation:
- The president cannot cancel student loans unilaterally without an Act of Congress.
- The president has the power to “delay” student loan payments.
- The president has the power to “postpone” student loans.
- However, the president doesn’t have the power of student loan forgiveness.
- The American public may not be happy paying someone else’s student loan debt.
Student loan cancellation: what this means
Student loan forgiveness: legal implications
Legally, Pelosi’s perspectives aren’t binding on the Congress or the president. Despite her role as speaker, Pelosi is simply giving her perspectives on student loan cancellation as a policy prescription. That said, Pelosi is speaking from experience as a long-serving member of Congress who has deep familiarity with the boundaries of congressional power.
Student loan forgiveness: political implications
The political implications are much larger. Pelosi, who is a progressive Democrat, is the highest-ranking Democrat in the U.S. House of Representatives. Her comments matter because Pelosi is instrumental in shaping which legislation comes to the House floor for a vote. Clearly, Pelosi believes that only Congress can enact student loan cancellation or that Congress must explicitly grant the president such power to act. Further, Pelosi questions the viability of wide-scale student loan cancellation as good public policy. This places her at odds with a contingent of progressive Democrats in Congress who are lobbying for wide-scale student loan cancellation ranging from $50,000 to total student loan forgiveness.
Student loan cancellation: are Pelosi’s comments surprising?
No, Pelosi’s comments aren’t surprising. One could be surprised that she made these comments on student loan cancellation publicly. One could also be surprised that Pelosi made these comments only one day after Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) made another plea to Biden to cancel up to $50,000 of student loans. Effectively, Pelosi’s comments throw water on Schumer and Pelosi’s argument that the president already has unilateral authority to enact student loan cancellation per the Higher Education Act of 1964.
However, Pelosi’s comments aren’t surprising because most members of Congress feel the same way. That may surprise you, given that Democrats control both houses of Congress. Simply put, Democrats in Congress don’t have enough votes to pass any student loan cancellation. That includes total wide-scale student loan forgiveness, $50,000 of student loan forgiveness, or even $10,000 of student loan forgiveness. This is why various members of Congress have put repeated pressure on Biden to cancel student loans, even though it’s not clear that Biden has such authority. Supporters of student loan cancellation in Congress such as Schumer, Warren and Rep. Ayanna Pressley (D-MA), for example, have been strong advocates for student loan borrowers seeking at least partial student loan cancellation. However, members of Congress who oppose wide-scale student loan cancellation rarely speak out against student loan forgiveness. So, there is a natural imbalance when it comes to members of Congress speaking publicly on student loan forgiveness, which can result in a misperceived popularity about the topic among rank and file members.
Student loan cancellation: what this means for student loans
Pelosi is one voice among many in Washington. Some may say she doesn’t speak for all Democrats, all members of Congress, or even the president. Others may simply dismiss her perspectives as political noise. However, Pelosi is the Speaker of the House and her voice may indirectly speak for what many in Congress believe but don’t say publicly. Notably, this has been the president’s perspective too — that he doesn’t have unilateral authority to enact student loan cancellation without any further authorization from Congress. That said, Biden supports $10,000 of student loan cancellation, so he does think student loan cancellation is good public policy so long as Congress cancels the student loan debt. Pelosi’s comments are not a positive for student loan cancellation happening anytime soon, at least in Congress.
Student loan cancellation: next steps
The next step on student loan cancellation is for the U.S. Department of Education to issue its recommendations on Biden’s legal authority on wide-scale student loan forgiveness to Biden. Based on that recommendation, Biden can decide whether to proceed with wide-scale student loan forgiveness. Since becoming president, Biden has cancelled $3 billion of student loans. That student loan cancellation was targeted student loan cancellation for only certain student loan borrowers (not wide-scale student loan forgiveness) and Biden acted under existing legal authority. Temporary student loan forbearance ends September 30, 2021, which means that student loan borrowers will start repaying federal student loans again starting October 1. According to the Education Department, student loan borrowers will have received more than $90 billion in student loan cancellation as a result of the temporary student loan payment pause which has been in effect since March 2020. That amount of student loan relief could impact the president’s decision on further wide-scale student loan cancellation.
Ultimately, it’s up to Congress to pass legislation on student loan cancellation, or the president — if it’s determined he has such executive power — to cancel student loans. In the meantime, now is the time to focus on student loan repayment. Here are some popular options for student loans that can help you save money:
