The student loan payment pause is set to expire. Where does Biden stand?


A growing chorus of advocates and politicians is calling for Biden to unilaterally cancel the nation's $1.7 trillion in federal student debt.

In two months, student loan payments will resume for more than 43 million Americans for the first time since the coronavirus pandemic began in March 2020 — that is, unless President Joe Biden cancels federal student loan debt, as advocates and politicians are calling on him to do with renewed force.

Last Wednesday, John B. King Jr., former President Barack Obama's education secretary, penned an op-ed for Insider to make his case.

"If we are truly going to create an economy that breaks down barriers to opportunity and lifts everyone up, then President Biden must heed his own wise advice and act now to cancel student debt," King wrote in the opinion piece.

King told the American Independent Foundation that Biden has the legal authority to unilaterally cancel all federal student loans owed to the Department of Education. Biden has questioned that authority and asked the departments of Education and Justice to create memos on the issue, which his administration has yet to release.

Currently, student loan borrowers hold a total of $1.7 trillion in debt, according to the Federal Reserve.

On the campaign trail, Biden promised to forgive up to $10,000 per borrower and stated, "Young people and other student debt holders bore the brunt of the last crisis. It shouldn't happen again." While he's not followed through on that pledge, the Biden administration has taken a number of steps to address the nation's student debt crisis.

The Department of Education forgave $415 million worth of debt for approximately 16,000 borrowers last week. That relief targets defrauded students who attended schools like DeVry University and ITT Technical Institute, which the department decided misled students or broke the law.

During the Trump administration, Education Secretary Betsy DeVos allowed a backlog of tens of thousands of claims from defrauded students to amass. Biden's Department of Education is working to clear that backlog and provide relief to students who were victims of predatory for-profit colleges.

In October, the Biden administration also expanded the Public Service Loan Forgiveness program, which offers debt cancellation for people who commit their careers to the public sector, and offered $5.8 billion in relief last August for 323,000 borrowers with a total and permanent disability. The Department of Education claims all of these actions amount to a total of $16 billion in relief for student loan borrowers. That doesn't include the money borrowers saved when Biden extended the student loan payment moratorium to May 1.

"While we continue to deliver immediate relief for those struggling with debt, our overall goal is permanent change that reduces indebtedness and makes college more affordable," a Department of Education spokesperson said in a statement provided to the American Independent Foundation. "The Department is also continuing to work in partnership with colleagues at the White House to review options with respect to debt cancellation."

But advocates for broad-based debt cancellation are not satisfied.

"These are not new policies, this is just making the broken system work as it was supposed to," Cody Hounanian, executive director at the Student Debt Crisis Center, said in a phone call.

"It's a drop in the bucket when it comes to our $1.7 trillion student debt problem," he added. "We're talking here about 1% of our total student loan debts — there's still 99% of us who haven't received any relief, even though they're struggling to put food on the table, struggling to save for college and send their children to school."

Loan forgiveness advocates argue that widespread federal debt cancellation would boost a faltering economy by encouraging spending, as well as alleviate a growing racial wealth gap.

Currently, Black college students owe around $25,000 per person more in student loan debt than white borrowers, according to the Education Data Initiative.

"This student debt crisis exacerbates the racial wealth gap," King said. "Affluent students enter their post-college life often without any debt, and so they are free to make choices around lifestyle, career without that looming weight. And for students who have debt, this is something that often people feel will never go away, or they can't even see the path to getting out of the debt."

Advocates point to the moratorium as evidence that the government can afford to forgo the money.

Braxton Brewington, press secretary of the Debt Collective, a national debtors' union, points out that it wouldn't be $1.7 trillion in additional lost income for the government, but that the money's already been disbursed to borrowers. He wants people to think of the money as grants for education, not loans to be collected on.

"It's proven something that we've always known, which is the federal government doesn't need our debt payments to function," Brewington told the American Independent Foundation. "They don't need them for anything. It's been paused for two years, the sky hasn't fallen, everything has been fine."

There's a growing chorus, among not just advocates, but also politicians and experts, who want to see Biden act to relieve student borrowers.

That's on top of the American electorate, who broadly support debt cancellation. A Morning Consult poll found that 62% of survey respondents in December wanted the federal government to eliminate some amount of student loan debt. Among Democrats, the share of supporters jumps to 85%.

In January, more than 80 Democratic lawmakers called on Biden to cancel up to $50,000 in debt per federal student loan borrower, citing the economic toll the pandemic has wrought on Americans.

Rep. Ayanna Pressley (D-MA) — who is leading the group of lawmakers, along with Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), and Reps. Pramila Jayapal (D-WA), Ilhan Omar (D-MN), and Katie Porter (D-CA) — argued loan cancellation can be achieved with "a flick of a pen."

"Canceling student debt by executive action is good policy, good politics, and would change the lives of millions by boosting our economy, helping to close the racial wealth gap, and allowing folks to buy homes, save for the future, and more," Pressley said in a statement provided to the American Independent Foundation.

Progressive lawmakers like Reps. Alexandria Ocasio-Cortez (D-NY) and Cori Bush (D-MO) claim that following through on a massively popular campaign promise could bolster their chances in the upcoming midterm elections. Biden attempted to make community college free through his Build Back Better agenda.

When Democrats first introduced their $3.5 trillion spending plan in the Senate in August, it included two years of tuition-free community college for all Americans. That policy was later scrapped from a compromise framework of the bill released in October, and Dr. Jill Biden announced in February that it was officially off the table, after the bill failed to garner support from Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ).

With the bill dead for the time being, due to the objection of Democratic holdouts and the entire GOP caucus, advocates say student debt cancellation at the executive level represents Biden's best shot at making education more equitable and accessible for all.

"Fundamentally, this to me is a question about the kind of society we want to build," King said. "We will have a stronger society if we see higher education as a public good, rather than placing all of the burden on students and families."

Published with permission of The American Independent Foundation.