The Biden government is considering using the executive’s action to forgive the federal debt of American students, the White House spokeswoman said on Thursday, responding to pressure from Democratic lawmakers and progressive groups.
President Biden had previously questioned his ability to use executive actions to forgive some or all of America’s federal student debts. Instead, he urged Congress to pass legislation to cancel $ 10,000 in student debt for each borrower.
The White House changed on Thursday, saying it was open to forgive debts without Congressional action. “Our team is looking into whether there is any action he can take through executive action and he would like to be given the opportunity to sign a bill sent to him by Congress,” wrote Jen Psaki, press secretary of the White House, on twitter.
Ms. Psaki’s comments followed a news conference held last Thursday by Senate majority leader Chuck Schumer (D., NY), Senator Elizabeth Warren (D., Massachusetts) and representatives Ilhan Omar (D. , Minnesota), Ayanna Pressley (D., Mass.), Alma Adams (D., NC) and Mondaire Jones (D., NY)
Mr. Schumer urged Mr. Biden to use his executive powers to eliminate $ 50,000 in student loan debt for all borrowers.
“This debt prevents people from buying cars, going on vacation, starting a family, getting the job they want. It is a major anchor across our economy. And there is very little the president can do with a touch of a pen that boosts our economy more than canceling $ 50,000 in student debt, ”said Schumer.
More than 43 million Americans owe a total of $ 1.6 trillion in federal student loans. Josh Mitchell of WSJ explains how President Biden plans to help borrowers deal with this debt. Photo illustration: Carlos Waters (Originally published on January 12, 2021)
“The end result is that this is one of those things that the president can do alone. Senator Warren and I researched this extensively, ”he added.
Senate Republicans have resisted legislative efforts to forgive student debts, saying that such a move would help many wealthy families and cost taxpayers.
While canceling student debt would provide financial relief for millions, it would also raise questions of justice for students who have already paid their loans or avoided taking out large loans, and for people who never went to college.
A law enacted last year suspended monthly payments from most borrowers on their student loans until September 2020 and then President Trump extended the suspension until January this year. Biden, who took office on January 20, used executive action to suspend payments until September 2021, to help borrowers resist the coronavirus pandemic.
Biden also said he supports the cancellation of $ 10,000 in student loan debt for people on federal loans, but did not include the proposal in a $ 1.9 trillion Covid-19 relief package that his government is promoting.
Democratic Senate leaders and progressive groups have been arguing for months that the president has the authority to forgive federal student debts unilaterally.
But some legal experts say that forgiving student debts through executive actions would be illegal. In the final days of the Trump administration, a political appointee serving as the Department of Education’s legal advisor came to that conclusion.
About 43 million Americans owe $ 1.6 trillion in federal student debt, data from the Department of Education show. Americans owe more on student debt than any other form of domestic credit, except mortgages.
Most of the $ 1.6 trillion in federal student loans was provided by the Treasury Department and is now held by the United States government. But part of that total is loans originally made by private creditors and guaranteed by the federal government. Biden said he wants to forgive both types of loans. Forgiving them would be covered by federal taxpayers.
Congressional Democrats asked Biden to forgive student debt through executive action during his first 100 days in office. Progressive groups have increased the lobby for the president to do so.
In December, Biden, as president-elect, said in a liaison with news columnists: “It is debatable that I can have – the president can have – executive authority to forgive up to $ 50,000 in student debt. Well, I find that quite questionable. I’m not sure about that. I am unlikely to do that. “
Forgiving student debts carries at least one big risk – that a judge finds the change illegal, which can create confusion among borrowers.
There has been growing support among Democrats for some form of debt cancellation and free college in recent years, with the pressure growing stronger after the coronavirus pandemic.
Write to Josh Mitchell at [email protected] and Eliza Collins at [email protected].
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