The date when student loan repayments resume is approaching—fast. On Feb. 1, 2022, the 43 million borrowers who have student loan debt will be on the hook to make payments after nearly two years of having the option to do so. Amid the debate about the length of the student loan forbearance period, some Democrats have continued to push for more lasting change to curb the student debt crisis.
AOC presses Biden to use executive power to wipe out student loan debtBY Sydney LakeNovember 29, 2021, 9:32 PM
Namely Democrats, including Senate Majority Leader Chuck Schumer, Sen. Elizabeth Warren, and Rep. Alexandria Ocasio-Cortez, want to see outright mass cancellation of student loan debt through executive order by the Biden administration.
“There is an enormous amount of executive action that they’re sitting on that I think is underutilized [on student loans],” Ocasio-Cortez told the New York Times last week.
Ocasio-Cortez is a cosponsor of H. Res. 100, a resolution “calling on the President of the United States to take executive action to broadly cancel Federal student loan debt.” She has also cosponsored the Student Loan Forgiveness for Frontline Health Workers Act and Student Debt Emergency Relief Act, both of which were introduced but not acted upon.
The problem is that President Joe Biden and other Democrats, including Speaker of the House Nancy Pelosi, don’t think that an executive order will get the job done.
“I don’t think I have the authority to do it by signing [an executive order],” Biden said during a CNN town hall on Feb. 17, 2021. Pelosi agrees with Biden, saying that this type of debt cancellation could be accomplished only by an act of Congress.
It’s time to ‘bring the heat on Biden to cancel student loans’
Ocasio-Cortez, among other Democrats, are continuing to pressure Biden and the U.S. Department of Education to make moves on more widespread student loan debt forgiveness amid negotiations on the president’s Build Back Better framework, which was passed by the House earlier this month. There were only a handful of House Democrats who voted “no” on BBB—including Ocasio-Cortez.
“Why are we taking this as a legislative compromise, when the opportunity is so much greater, or when Biden could do this stuff with a stroke of a pen, and is just reminding us that he’s choosing not to?” Ocasio-Cortez asked during her New York Times interview.
The goal of the BBB budget is to “rescue, recover, and rebuild the country,” according to the White House, and addresses issues ranging from childcare to climate change to Medicare expansion. The budget for BBB was trimmed to $1.75 trillion from $3 trillion.
“I think given how much [Build Back Better] has been slashed, there is more opportunity than ever to bring the heat on Biden to cancel student loans,” Ocasio-Cortez said in an Instagram story on Oct. 28, the same day Biden released an updated framework for the BBB budget resolution. But uncertainty looms over Biden’s authority to execute that by his own power.
“He doesn’t need [Sen. Joe] Manchin’s permission for that, and now that his agenda is thinly sliced, he needs to step up his executive action game and show his commitment to deliver for the people,” Ocasio-Cortez argued in her Instagram story. “We need to get this done.”
What Biden has done for student loan borrowers
Biden hasn’t been too keen on mass student loan forgiveness, instead opting for more targeted cancellations. His administration has canceled more than $11 billion in student loans thus far, which is dwarfed by the overall outstanding student loan debt that stands at more than $1.7 trillion.
The Biden administration and Education Department have canceled debt for borrowers who attended now-defunct institutions, as well as borrowers with total and permanent disabilities. There’s also been an overhaul of the Public Service Loan Forgiveness (PSLF) program, which was a historically failed program intended to help public service workers cancel their student loan debt.
Ultimately, Biden’s measures thus far help hundreds of thousands of borrowers, but there are still millions of people who are strapped with student loan debt. Ocasio-Cortez is among a cohort of Democrats including Warren and Schumer who’ve also pushed for the forbearance period to be extended.
“We need to organize and prepare actions now, because the showdown will be in late January when payments are ‘supposed’ to kick back up,” Ocasio-Cortez said in her Oct. 28 Instagram post.
While the future of more student loan forgiveness remains unclear, policy insiders have told Fortune they anticipate further rounds of targeted student loan forgiveness—perhaps for groups including borrowers in default and low-income borrowers; teachers and parents; borrowers from the military and borrowers who “really cannot pay back those student loans.” Mass debt cancellation seems pretty unlikely, though.
“The Biden administration has a real track record now that we can look to and know how it thinks about awarding student loan relief,” Andrew Pentis, a certified student loan counselor with Student Loan Hero, previously told Fortune. “It’s been a track record of targeted relief to specific borrowers—not the mass forgiveness proposals that many progressives have called for.”