Student loan forgiveness has gotten a lot of attention this year, particularly from Democratic congressional leadership calling for much of the debt to be completely wiped out. That’s certainly of interest to the more than 43 million affected borrowers, who have $1.7 trillion in debt as of the second quarter.
Senate Majority Leader Chuck Schumer has been one of the loudest voices in the fight for mass student debt cancellation. He and other legislators—Sen. Elizabeth Warren in particular—have been pushing the Biden administration to cancel up to $50,000 in student loans for each borrower. Schumer refers to the amassed student debt as the “anchor” weighing down minority groups and low-income borrowers.
Because the President’s party controls Congress, Schumer is putting the heat on Joe Biden to cancel student debt as soon as possible. “Now is the time to take action,” Schumer said during an event hosted by the Brookings Institution in late June this year.
Schumer says that Biden could cancel student debt with “the flick of a pen,” but Speaker of the House Nancy Pelosi disagrees that this could be taken care of with an executive order. Rather, she argues that mass student debt cancellation needs to be achieved through an act of Congress.
“People think that the President of the United States has the power for debt forgiveness,” she said during a press conference in late July. “He does not. He can postpone, he can delay, but he does not have that power.”
Student loan relief efforts in Congress
Several bills have been introduced to address larger-scale debt cancellation. In late July, Rep. Troy Carter, a Democrat from Louisiana, introduced the Student Loan Relief Act, which would direct the secretary of education to discharge up to $50,000 of federal student loan debt for each borrower.
Pelosi hasn’t called for specific student debt cancellation measures. She has said that financial reasons shouldn’t be a barrier to attending college, but that many taxpayers could be resistant to footing the bill if they or their children hadn’t chosen to continue their education themselves.
“What we’d like to do is have an economy that is fair, that gives opportunity, and does not hold anybody back because of financial reasons,” she said during her late July press conference. Rather, forgiveness has to be viewed in a “fair way,” in which it gives opportunity to all of America’s families, she added.
Where Biden stands on forgiveness
Biden has said he won’t support large-scale debt cancellation. While he’s open to allowing up to $10,000 to be forgiven per borrower, he doesn’t seem to budge on meeting Schumer and Warren at the $50,000 mark. The Biden administration has, however, approved discharging over $9.5 billion in student loans for more targeted groups, including borrowers with disabilities and those who attended now-defunct institutions.
Although financial hardship caused by COVID-19 certainly exacerbated the conversation about forgiveness, the “student debt crisis,” as it’s come to be known, is not a new issue.
“Even before the coronavirus pandemic plunged our economy into chaos, student loan borrowers were already in crisis,” Warren said in a statement. “The President of the United States has the power to broadly cancel student loan debt, help close the racial wealth gap, and give a big boost to families and our economy.
“It’s time to use this existing authority and permanently improve the lives of tens of millions of Americans.”
See how the schools you’re considering fared in Fortune’s rankings of the best executive, full-time, and online MBA programs.
