A group of Democrats ramped up pressure on President Joe Biden Thursday to cancel some student loan debt using his presidential powers to alleviate the monthly burden on borrowers, especially during the current economic crisis.
The resolution uncovered at a press conference outside the U.S. Capitol, where Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.), as well as Democratic Reps. Ayanna Pressley (Mass.), Alma Adams (N.C.), Mondaire Jones (N.Y.) and Ilhan Omar (Minn.) called on Biden to wipe out up to $50,000 in federal student loan debt for all borrowers with zero tax liability following any sort of cancellation.
“The bottom line is this is one of those things the president can do on his own,” Schumer said. “Other presidents have done it—not in the magnitude we’re asking—but the fact that they have been able to do it shows that there is legal authority.”
The majority leader added, “We are pushing the president and his people and we are very hopeful that the cry from one end of America to the other—‘take this student loan debt off our backs’—will be heard in the White House.”
Pressley also firmly pressed the president, saying that Biden must “be bold and responsive to the movement that elected him” and noted the measure has more than fifty co-sponsors in the House, along with bicameral support.
But the Democratic efforts might not be enough to convince the president to support the measure, as Biden and his administration have not publicly embraced the idea. White House press secretary Jen Psaki told reporters on Thursday that “the president has and continues to support canceling $10,000 of federal student loan debt per person as a response to the Covid crisis,” and any future action must be taken up by congressional lawmakers.
On his first day in office, Biden signed an executive order that continued the pause on monthly student loan payments and interest due to the coronavirus pandemic until at least October. The president has also previously proposed to Congress cancelling up to $10,000 of federal student loan debt per borrower as another form of relief—a measure that has little Republican support.
Biden’s far-left colleagues and education advocates have been lobbying the president for more student loan relief action than just an extension of the suspension, with one effort made by Schumer and Warren that called for the president to use his existing authority under the Higher Education Act of 1965 to nix the debt through executive order. The suggestion received a flurry of legal debate, with experts arguing over the president’s power to cancel student loan debt with just a signature.
Although the forgiveness measure would likely aid the millions of student debt borrowers who drown in repayment, there are several problems argued by economists and policy experts with forgiving student debt as form an economic stimulus.
“On student debt, certainly cancelling any part of it would ultimately add to federal deficits and debt. It would fall entirely on the taxpayer, since the Obama administration effectively nationalized the program,” Milton Ezrati, chief economist for Vested, a New York-based communications firm, and contributor to TNI, said.
Ezrati offered an alternative approach to student loan debt forgiveness as he added, “Better targeting for the immediate crisis, if that is the right word, would allow a hiatus in payments. It would also look less like a transfer from the taxpayer to the middle class. This is, after all, student debt, not [a] program for the indigent.”
A report by the Committee for a Responsible Federal Budget discovered that a student loan forgiveness program would have a small boost on the economy, increasing cash flow by roughly $90 billion per year, while the initiative would cost nearly $1.7 trillion.
“For the longer term, the government might offer relief and do less harm to the budget by extending the term of repayment and perhaps broadening programs that excuse some of the debt for those who accept lower pay for socially useful work,” Ezrati said.
It’s unclear whether Biden would fulfill the Democratic request, as Psaki later tweeted on Thursday that Biden’s team “is reviewing whether there are any steps he can take through executive action, and he would welcome the opportunity to sign a bill sent to him by Congress.”
Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.