Senate Majority Leader Chuck Schumer (left) and Sen. Elizabeth Warren (right) (Photo by Chip … [+]
Senators Chuck Schumer and Elizabeth Warren have doubled down on their strategy for student loan cancellation.
Here’s what you need to know — and why their strategy may be bad news for student loan forgiveness.
Student loans
Millions of student loan borrowers are wondering whether they will get student loan forgiveness. Based on this current strategy in Congress, it’s unclear if there will be any student loan cancellation. Why? Schumer, the Senate majority leader, and Warren are two champions of student loan cancellation. That said, their latest tweets to pressure President Joe Biden to cancel student loans through executive order won’t help their cause. Here’s what they each tweeted:
Chuck Schumer: “Today would be a great day for President Biden and Vice President Harris to #CancelStudentDebt.”
Cancel student loans
Elizabeth Warren: “Canceling student loan debt would immediately put money in the pockets of millions of Americans. It would help dig our economy out of this crisis. And we don’t have to wait for Congress: the Biden-Harris administration can get it done with their executive authority.”
Cancel student loans
On the surface, these tweets seem like simple calls to action. Warren and Schumer want President Joe Biden — not Congress apparently — to cancel student loans through executive order. However, this approach raises several concerns about the possibility of Congress — which Democrats control — passing student loan cancellation. Let’s explore why.
Cancel student loans through executive order
Warren says president can cancel student loans
According to Warren and Schumer, the Higher Education Act of 1965 (which is current law) provides legal authority for the U.S. Secretary of Education to cancel student loans. In their view, the president already has legal authority 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.”
Biden wants Congress to cancel student loans
Biden wants to cancel student loans immediately. In this sense, Biden, Schumer and Warren agree in principle. As part of a comprehensive student loans plan, Biden wants Congress to cancel $10,000 of student loans for student loan borrowers in response to the Covid-19 pandemic. However, Biden said he’s unlikely to cancel student loans through executive order. Instead, he wants Congress to pass standalone legislation or include student loan cancellation in the new stimulus bill. Why? Biden hasn’t elaborated, but likely understands that Congress is the appropriate branch to cancel student loans because Congress is in charge of federal spending. Student loans can be cancelled by the U.S. Secretary of Education (who is part of the executive branch) due to fraud, school closure or total and permanent disability. It’s unlikely, however, that Congress would grant the president unchecked, unilateral power to cancel student loans of any amount for every student loan borrower without any congressional approval. It’s more reasonable to assume that Congress granted authority to the Education Secretary to cancel student loans in limited circumstances as a procedural matter.
Why student loan tweets may be bad news for student loan cancellation
These dual tweets may not further the cause for student loan cancellation. Here are a few reasons why:
Biden unlikely to use an executive order
Biden has made his position clear: Congress should cancel student loans and he’s unlikely to use an executive order. Biden has signed multiple executive orders since becoming president, including pausing student loan payments for 8 months. If Biden wanted to cancel student loans through an executive order (or believed he has the authority to do so), he would have cancelled them. Congress is the branch that passes laws (widescale student loan forgiveness included). There’s nothing wrong with championing your cause, but is the strategy to pressure the president until he agrees with your position?
Intraparty fighting
The optics don’t look great. Two Democratic senators, including the Senate Majority Leader, pressuring the president (who is also a Democrat) to cancel student loans.
Timing of tweets
Congress is focused on a major stimulus package — which doesn’t include student loan cancellation — and an impeachment trial. If Schumer and Warren want student loan cancellation, how about including student loan forgiveness in the stimulus package?
Why not focus on legislation?
Democrats control Congress and the White House. There are multiple proposals in Congress, including from Schumer and Warren, for student loan cancellation. Why not simply pass legislation? This raises questions whether Schumer believes he can pass student loan cancellation through legislation.
Will your student loans get cancelled?
Will your student loans get cancelled? Tweeting at the president probably won’t lead to student loan cancellation. If you can persuade the president that your legal interpretation is accurate, then do so. If not, try to pass legislation. Biden has proposed to cancel student loans three ways. This means Congress has three different opportunities to pass student loan cancellation legislation. However, it’s unlikely Biden will cancel student loans through executive action. These dual tweets don’t advance the ball. If anything, they raise questions about why Senate Democrats don’t pass standalone legislation or include student loan cancellation in the stimulus bill. Intraparty fighting also leads to roadblocks, which could mean no student loan cancellation. Perhaps they don’t have the votes. If true, then student loan forgiveness may not be a foregone conclusion. Therefore, don’t count on automatic student loan cancellation. Instead, get a student loans game plan. Start with these three options, all of which have no fees:
