After months of silence on student loan forgiveness from the White House, progressive lawmakers, led by Rep. Ilhan Omar (D-Minnesota), have written a letter giving President Joe Biden a two-week deadline to release a memo on student debt cancelation.
“Decades ago, Congress voted to authorize the executive branch to cancel federal student loans. Federal student debt can be canceled with the ‘flick of your pen.’ This authority is already being put to use, as it is currently being used to cancel the interest owed on all federally-held student loans,” the lawmakers wrote, referring to the student loan payment pause implemented during the pandemic. “Now it is time for you to honor your campaign pledge and use this authority to cancel all student debt.”
In April, White House Chief of Staff Ron Klain said in an interview that the president had asked the Department of Education to prepare a memo on the legal feasibility of canceling student debt through the executive branch alone. When asked whether the president was exploring canceling up to $50,000 in loans per borrower, Klain did not confirm or deny the amount. “Hopefully, we’ll see that in the next few weeks,” he said.
Six months have passed since that interview, the progressives noted — but the memo has still yet to materialize.
“With over six months having passed since that interview and only four months of pandemic forbearance left, borrowers are anxiously awaiting the administration’s actions,” the lawmakers wrote. “The time has come to release the memo and cancel student debt.”
They then gave Biden a deadline to release the memo by October 22, or two weeks from Friday.
The letter, which was first obtained by Politico, is signed by members of the progressive “Squad,” including Representatives Alexandria Ocasio-Cortez (D-New York), Cori Bush (D-Missouri) and Jamaal Bowman (D-New York). Their statement comes as the Education Department overhauls the student loan forgiveness program for public workers, which has long been plagued by bureaucracy and red tape.
Due to the pandemic, student debt repayment has been paused through January of next year. But the Education Department says that August’s extension of the pause will be the last one.
The letter warns of the financial turmoil on the horizon when debt payments resume. “The resumption of payments on federally-held student loans weighs heavily on tens of millions of borrowers,” the lawmakers wrote. “Forty-five million student debtors collectively owe $1.8 trillion of student debt, a sum almost equivalent to the $1.9 trillion the world’s billionaires made in 2020 alone. While the rich have gotten richer, the economic harm of the pandemic has not subsided for ordinary Americans.”
The unreleased memo is supposed to include the Biden administration’s view on the legality of the issue — but legal scholars have said that the president has the broad authority to cancel student loans, progressives have pointed out. Law experts at the Legal Services Center of Harvard Law School wrote last month that legal frameworks allow for Biden to implement loan forgiveness; other legal experts are either confident that it’s possible, or say that even if the law is murky, Biden should try it anyway because Congress hasn’t taken action.
On the campaign trail, Biden promised to cancel $10,000 of student debt for borrowers. Lawmakers like Senate Majority Leader Chuck Schumer (D-New York) and Sen. Elizabeth Warren (D-Massachusetts) have called for up to $50,000 in cancellations, which would relieve many borrowers of their loans altogether.
Advocates for student loan forgiveness argue that making sweeping debt cancelations would have a tremendously positive impact on the economy, which is especially critical during the pandemic. Some economists have said that if all student loan debt were forgiven, it would be equivalent to giving around $3,000 each year to the approximately 42 million student loan borrowers. Warren has pointed out that canceling $50,000 in loans per borrower would result in a higher Gross Domestic Product (GDP), as well as higher homeownership and job creation rates.
Student debt forgiveness would also have a vastly transformative impact on borrowers’ lives. Borrowers say they would be able to save money for emergencies, retirement or housing, and that they would spend more on household needs like food, appliances or entertainment.
The lawmakers pointed out that student loan debt “significantly reinforces inequality” — and therefore enacting debt forgiveness would also be a means of advancing racial justice.
“Two thirds of all student debt is held by women, with Black women the most burdened of all. Twenty years after starting college the average white student owes 6 percent of what they originally borrowed, around $1,000, while the average Black student still owes 95 percent, around $18,500,” they wrote. “Canceling all student debt would narrow the racial wealth gap among young Americans by more than half.”