Progressives See Final Payment Pause as Last Chance for Debt Forgiveness

By Owen Daugherty, NASFAA Staff Reporter

The final extension of the payment pause through January for borrowers with federal student loans has set the stage for a looming decision involving the White House and several federal agencies regarding the fate of millions of borrowers’ loan statuses.

For months, progressives have been pushing President Joe Biden to use his executive authority to issue widespread student loan forgiveness, arguing that he can do so by executive order and without having to go through Congress.

With a Jan. 31 deadline for when borrowers are set to resume making payments, advocates for debt forgiveness see this window of time as an opportunity for a final push to persuade the White House to take action.

Advocates and lawmakers are pressuring Biden to act before more than 40 million borrowers must resume paying off their loans, starting in February.

“Sounds like January 31, 2022 is the deadline to cancel student debt. No more extensions required,” Rep. Jamaal Bowman (D-N.Y.) wrote on Twitter.

Progressives, led by Senate Majority Leader Chuck Scumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.), have supported executive action on student loan forgiveness for years as a means of reducing inequality and closing the racial wealth gap. The pandemic has only made those calls louder.

While Biden has signaled support for providing $10,000 in student loan debt forgiveness for each borrower, and not the $50,000 some are pushing for, he has also signaled that he doesn’t believe a president has the legal authority to cancel student loan debt unilaterally without further authorization from Congress.

As such, he has asked the Department of Education (ED) and the Department of Justice (DOJ) to review his legal authority. Those on both sides of the debate are anxiously awaiting a memo that could ultimately decide the future of the federal student loan portfolio. That request was made at the beginning of Biden’s time in office, and more than seven months have passed with no word on whether or not Biden has the legal authority.

Progressives like Warren aren’t waiting to see the contents of the memo, though, and instead are taking to the airwaves to continue making their case.

“The president has the authority to cancel student loan debt,” Warren said in a recent television interview. “You know how I know that? Because President Obama did it. Because President Trump did it. And because President Biden has done it.”

She is referring to the cancelation of $10 billion in student loans the Biden administration has already granted, though that cancelation came in the form of targeted debt relief for borrowers with a total and permanent disability (TPD) or those who already had their borrower defense claims approved, for example.

Warren and others remain adamant that the Higher Education Act (HEA) gives the president the power to eliminate student debt for borrowers. While there is far from consensus on that view, even with a legal memo supporting student loan forgiveness, there is no guarantee Biden would cancel any amount of student loan debt. 

Further, a legal memo is non-binding and isn’t the same as legislation. A legal memo also wouldn’t prevent potential action on student loan forgiveness from being challenged in court, which is likely should Biden choose to provide loan forgiveness.

Still, progressives in Congress aren’t pinning their hopes on the memo, instead upping the pressure campaign in response to the final extension of the payment pause.

“Student debt cancellation is one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity,” Schumer, Warren, and Rep. Ayanna Pressley (D-Mass.) said in a statement shortly after the final extension was announced. “We look forward to hearing the administration’s next steps to address the student debt crisis.”

Republicans seem to have noticed the push, as four House Republicans sent a letter to Education Secretary Miguel Cardona last week urging him to rule out potential mass forgiveness of student loan debt without congressional approval.

Republican Reps. Ted Budd (N.C.), Warren Davidson (Ohio), Scott Perry (Pa.), and Barry Loudermilk (Ga.) in the letter asked Cardona for a “commitment that you will not seek to usurp the will of the people and the authority Congress has delegated in cancelling student debt beyond what the law clearly allows.”

“Mass cancellation of student loan debt would not only be a clear violation of the separation of powers but would also be an affront to the millions of borrowers who responsibly repaid their loan balances,” the letter states.

While Congress is clearly divided and the White House awaits a legal memo, tens of millions of borrowers will have a few more months without having to make payments as they await a decision on the fate of their student loan debt.


Publication Date: 9/14/2021

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