President Biden has said that his administration is looking into whether he can cancel student debt using executive action. But will he ultimately decide to enact broad student loan forgiveness? And if so, what will it look like? Student loan borrowers may have answers soon.
Biden has said that he supports cancelling student debt, but he has opposed calls for $50,000 or more in student loan forgiveness, as suggested by student loan borrower advocacy organizations and congressional Democrats. He has supported a smaller amount of $10,000 in student loan forgiveness since the 2020 presidential campaign, although he has not firmly come out against a higher amount. Biden has also argued that any student debt cancellation should be targeted, potentially based on income or the type of school the borrower attended.
But while Biden has been open to some form of student debt cancellation, he has expressed reluctance to using executive action to implement it. Progressives in Congress and several leading student loan attorneys have argued that the Higher Education Act — the statute that governs much of the federal student loan and financial aid system — gives the president wide latitude to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” Advocates have argued that the unambiguous language of this provision clearly indicates that Biden could cancel student loan debt, without any involvement or input from Congress. Some student loan advocates have also noted that the HEROES Act — which both President Trump and President Biden relied on to cancel billions of dollars in student loan interest in response to the Coronavirus pandemic — similarly provides authority to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” during a national emergency.
But others — including Biden himself — have expressed uncertainty about whether a president truly has the legal authority to cancel student debt unilaterally. Department of Education legal staff working under former Secretary Betsy DeVos had concluded that neither the Higher Education Act nor the HEROES Act gives the president the kind of power that borrower advocates say exists. In an opinion memo, Department attorneys argued that broad, unilateral student loan forgiveness would be contrary to what Congress had originally intended when it wrote these laws. The attorneys concluded that, “Congress appropriated funds for student loans with the expectation that such loans would be repaid” absent extraordinary and “specific circumstances.”
The White House has said that Biden would sign a student loan forgiveness bill passed by Congress, but no such bill has been sent to his desk. Congress has other priorities at the moment, including passing infrastructure legislation, police reform, and voting rights.
On April 1, Biden directed legal staff at the U.S. Department of Education and the Department of Justice to conduct a formal legal review of potential authorities that could be the basis for cancelling student debt through executive action. While there was no specific timeline for completion of that review, a White House spokesman suggested at the time that it would only be a few weeks.
It has now been six weeks since that legal review was initiated, and the White House has not indicated that the review is being extended. In addition, the current moratorium on most federal student loan payments, interest, and collections under President Biden’s extension of the CARES Act is scheduled to expire after September 30. Education Secretary Miguel Cardona recently suggested that it is unlikely that the student loan payment pause will be extended beyond that date (although he did not rule it out).
Taken together, this may mean that borrowers may have an answer soon as to whether Biden will take action to cancel student debt. The legal review, if it is not already completed, should be wrapping up soon. And if the administration wants to act, it would likely do so well before September so that student loan servicers are not faced with processing some form of mass student loan cancellation while upwards of 40 million borrowers simultaneously re-enter repayment on their student loans.
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