Biden can cancel up to $50K in student loan debt, says group of 85 Democratic lawmakers

BY Sydney LakeJanuary 28, 2022, 9:43 PM
President Joe Biden in the Oval Office in December 2021.
Doug Mills—Pool/Getty Images

The countdown is officially back on, as we’re in the 100-day window for student loan repayments to resume once again. For nearly two years, federal student loan borrowers have had the choice of whether or not to make payments during the COVID-19 pandemic—but May 1 is currently the date that option will end. 

Forbearance on student loans has been extended several times, and President Joe Biden has announced a few rounds of forgiveness that as of Jan. 20 total $15 billion; but that accounts for only about 1% of federal student loan debt. With more than $1.7 trillion in outstanding federal student loan debt held among 43 million Americans, Democrats and other advocates are continuing to push the administration to cancel up to $50,000 in student loan debt. 

On Jan. 25, a group of 85 Democratic lawmakers—across the House and Senate—sent a letter to Biden urging him to direct the Department of Education to “publicly release the memo outlining your legal authority to broadly cancel federal student loan debt and immediately cancel up to $50,000 of student loan debt per borrower.”

“In light of high COVID-19 case counts and corresponding economic disruptions, restarting student loan payments without this broad cancellation would be disastrous for millions of borrowers and their families,” the letter states.

The memo

In the spring of 2021, White House Chief of Staff Ron Klain said Biden had asked the secretary of education to explore if the executive branch has the legal authority to cancel student loan debt. At the time, the memo was promised to be made public within a few weeks. Nearly a year later, though, it’s just been crickets on that front. 

While the full memo still hasn’t been released, The New Yorker on Oct. 29, 2021, first reported that a heavily redacted version exists. This version doesn’t show much other than the fact that the White House had the memo for more than six months without releasing any information to the public. 

What Biden thinks about canceling student loan debt

Biden doesn’t buy the idea that he has authority to cancel federal student loan debt by executive order, but many Democratic lawmakers do. During the Cancel Student Debt Town Hall hosted by NextGen America, the Student Debt Crisis Center, Public Citizen, and MoveOn on Thursday, several Democratic lawmakers said they believed Biden has the authority to cancel student debt by executive order.

“Pausing student loans isn’t good enough,” Senate Majority Leader Chuck Schumer said during the town hall. “We need student debt erased—plain and simple.” Biden can, Schumer argued, cancel student debt with the “flick of a pen,” and the act doesn’t require any legislation. 

Democratic lawmakers and advocates are pressing Biden to cancel up to $50,000 in student loan debt per borrower, but Biden campaigned on forgiving just $10,000 per borrower. His tune has changed, however, during his year in office. 

During a press conference in mid-January, Biden was asked, “You campaigned on canceling $10,000 in student loans. Do you still plan to do so, and when?” He ignored the question. 

Also, during a CNN town hall on Feb. 17, 2021, Biden said he objected to forgiving student loan debt for borrowers who went to “elite” private colleges including Harvard University, Yale University, and the University of Pennsylvania. He still held this opinion in May 2021.

“The idea that you go to [the University of Pennsylvania] and you’re paying a total of 70,000 bucks a year and the public should pay for that? I don’t agree,” he told The New York Times

Not only are Democratic lawmakers pushing for Biden to cancel student debt—but they’re adding pressure to the timeline. They want student debt to be canceled ahead of the May 1 forbearance end date. 

“We’re all staring down another student-loan time bomb,” Sen. Elizabeth Warren said during the town hall. “Payments are going to resume. That could throw millions of families over a financial cliff when it explodes.”

See how the schools you’re considering fared in Fortune’s rankings of the best business analytics programs, data science programs, and part-timeexecutive, full-time, and online MBA programs.