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