Student Loan Debt Forgiveness Absent from Biden’s Coronavirus Relief Proposal

By Owen Daugherty, NASFAA Staff Reporter

President-elect Joe Biden released his administration’s pandemic relief package last week, calling for $170 billion to be directed toward education with $35 billion set aside for higher education. But noticeably absent from the proposal was any mention of canceling some amount of federal student loan debt for each borrower.

The proposal released Thursday was Biden’s first pitch to Congress and will likely set the terms for negotiations for when he takes office and lawmakers begin hammering out another federal relief package. The absence of any form of debt forgiveness struck a chord with consumer advocates, though, particularly because the policy proposal had become part of Biden’s election platform.

Biden previously proposed forgiving up to $10,000 of federal student loan debt per borrower, and several prominent Democrats have argued he has the authority to do so through executive action without Congress passing any legislation. However, officials with the Biden transition team recently said the administration would be asking Congress to tackle forgiving federal student loan debt through legislation.

David Kamin, Biden’s pick as deputy director of the National Economic Council, said Biden Biden “supports Congress immediately canceling $10,000 of federal student loan debt per person as a response to the Covid crisis.”

The omission of any mention of student loan debt forgiveness from Biden’s plan almost immediately drew the attention from advocates of the idea.

Americans for Financial Reform, the Center for Responsible Lending, Student Debt Crisis, Young Invincibles, and the National Association of Consumer Advocates in a joint statement said the absence of the call in Biden’s legislative request to Congress “heightens the urgent need for President-Elect Biden to cancel student debt administratively.”

“We hope the absence of debt cancellation in this package is a clear indication that President-Elect Biden is planning to act quickly to use his authority to cancel student debt through executive action,” the statement read. “We look forward to working with him to do that.”

Furthermore, the groups behind the statement also re-released a letter to Biden and Vice President-elect Kamala Harris with additional signees, calling on the incoming president to use his executive authority on his first day in office to cancel federal student loan debt, framing the idea in part as both a social justice issue and as one that could have a positive impact on health outcomes amid the ongoing pandemic.

It is looking increasingly unlikely that Biden will address the student loan debt through executive action on his first day in the White House, or even in his first few weeks. It’s also not immediately clear if Biden even has the authority to enact widespread student loan debt forgiveness without Congress. A non-binding memo written by a political appointee at the Department of Education (ED) argued that the secretary of education “does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify the repayment amounts or terms thereof, whether due to the COVID-19 pandemic or for any other reason.”

While Biden has already said he would exercise his executive authority to extend the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activity once he takes office, he has stopped short of committing to widespread debt forgiveness through executive action.

Although Democrats have control of both chambers of Congress, their majority in the Senate is razor-thin and Senate Republicans are unlikely to throw their support behind loan forgiveness of any kind. Democrats could look to pass some form of loan forgiveness without the 60-vote threshold through budget reconciliation, a process for consideration of bills to implement the policy choices embodied in the annual congressional budget resolution. However, with a lengthy legislative agenda and the Senate tasked with confirming Biden’s Cabinet picks, it’s unclear if Democrats will choose to prioritize student loan debt forgiveness.

A request for comment from the Biden-Harris transition team regarding how it plans to address the campaign’s proposal to forgive $10,000 of federal student loan debt per borrower was not immediately returned.

 

Publication Date: 1/20/2021


Holly G | 2/5/2021 5:23:54 AM

One way to forgive loans in a pathway that already exists is to expand PSLF to payments made under FELP program also.

Lydia R | 1/20/2021 1:19:32 PM

As someone that would really like to have my loans forgiven as well as helping students who attend our school, I completely understand there would be a delay in getting this promise fulfilled. There are a lot of more pressing issues that need to be resolved in the immediate future. Especially since none of us are going to need to do something about our loans now till next Fall.

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