Democrats Argue Student Loan Debt Forgiveness Would Offer Financial Relief to Seniors

By Hugh T. Ferguson, NASFAA Staff Reporter

As a slew of campaign priorities begin to get sifted into legislative and executive action, congressional advocates are redoubling their efforts to urge President Joe Biden to unilaterally tackle student loan debt forgiveness by touting the economic benefits for seniors.

Policy proposals dealing with large-scale forgiveness have been pitched by the more liberal wing of the Democratic party with Sen. Elizabeth Warren (D-Mass.), whose plan — first offered as a part of her presidential campaign — would offer borrowers up to $50,000 in student loan debt relief through a presidential executive order, leading the charge.

Warren’s proposal received the endorsement of Senate Majority Leader Chuck Schumer (D-N.Y.), and at the end of 2020 a companion measure was offered in the House.

While the legislative momentum has not seen much action since, the proposal caught the attention of the Department of Education (ED). Prior to Biden’s inauguration, ED weighed in on the issue by releasing a non-binding memo arguing that forgiveness of student loan debt through executive action would be out of the scope of the agency’s authority.

The constitutionality of the move by the executive branch has not yet been tested, but any unilateral action would very likely see a number of legal challenges.

Schumer and Warren are again calling on the Biden administration to immediately “cancel up to $50,000 in federal student loan debt,” specifically arguing that the debt burden for older Americans has grown at an alarming rate.

“Right now, over 43 million people in the United States are buried under $1.5 trillion dollars in federal student loan debt, including 6.3 million borrowers ages 50-64 and nearly a million borrowers over the age of 65 who may still be paying for a loved one’s education or for their own,” the senators wrote in a recent op-ed for CNBC. 

The duo also cite an AARP report that found 37% of Americans over the age of 65 are in default on their student loans, leading to garnished Social Security checks that impoverish seniors.

More than 70% of garnished Social Security benefits were just going toward student loan fees and interest, and not paying down seniors’ principal balances, leaving many seniors with a reduced standard of living just to stay stuck in a cycle of inescapable debt,” Schumer and Warren wrote.

Miguel Cardona, Biden's nominee for education secretary, recently referred to the issue of debt forgiveness as a “priority” but has not commented directly on offering a blanket forgiveness of debts. His confirmation hearing is slated for February 3. 

Congress now begins to work through a potential new batch of aid related to the pandemic, which is unlikely to include debt forgiveness, particularly because there was no language in Biden’s opening proposal.

However, Biden has taken action on relief for borrowers with federally-held student loans by pausing the administrative forbearance period, interest accrual, and the suspension of collections activity currently through September.

Biden has also indicated a willingness to extend the forbearance period further, depending on the economic recovery. It remains unclear whether blanket forgiveness would be offered before the end of that pause. A recently published CRS report raises legal concerns for Congress over the executive branch’s authority to act unilaterally on further extension of the current relief through the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 — the law which ED said granted it the authority to pause payments and interest accrual.

“As far as CRS’s research reveals, no court has interpreted or applied the HEROES Act or reviewed ED’s actions taken pursuant to the Act,” the report reads, setting the stage for a potential future legal challenge. “Thus, it appears no court has considered where the outer boundaries of the Secretary’s HEROES Act authorities lie.”

Stay tuned to Today’s News for more coverage of debt forgiveness efforts.


Publication Date: 2/2/2021

Robert W | 2/3/2021 8:1:51 AM

Tracy makes an excellent point. I have been in debt up to my eyeballs a couple times during my life but managed to pay it off. No one made me borrow the money any more than anyone made students and parents take out educational loans. I don't understand why the taxpayer is the one who should absorb the write off in these plans like Elizabeth Warren's. Borrowers who are dissatisfied with the education provided them should look to the school for relief, not the U.S. government. Just my opinion.

Bob Walker
Tupelo, MS

Tracy W | 2/2/2021 9:54:10 PM

I hate to sound like I walked to school up hill both ways but doesn’t anyone think people should pay for an education anymore? I took out student loans for my actual educational expenses and then oh yes paid them all back! Believe it or not I’m doing the same with my home and car. Life isn’t a free ride for everyone. It is a loan it is designed to be paid back. It is not a grant. P.S. I worked in financial aid for 30 years.

Joel T | 2/2/2021 11:31:06 AM

The second article about canceling student loan debt from NASFAA this week...

It's starting to appear that they're trying to lay out the case and manufacture support so that they can publicly support the push from the Biden administration in the coming days.

Please, stay neutral with this topic.

Patrick G | 2/2/2021 10:28:12 AM

Are parent PLUS loans included in the various student debt cancelllation proposals?

Louise D | 2/2/2021 10:22:15 AM

Also, the Government should look into reducing the Interest Rate on all older loans whether FFELP or Direct Loans that are above a certain percentage. (maybe 5%). As mentioned above, so many older people are paying on their loans but are getting nowhere because the interest accrues faster than they can afford to pay.

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.

Related Content

Today's News for November 28, 2022


Higher Ed Legislation to Watch in the Next Congressional Session


View Desktop Version