Over 80 Democrats have demanded that President Joe Biden cancel a portion of student debt and release an Education Department memo on his legal authority to do so, in an effort led by Rep. Ayanna Pressley (D-Massachusetts) and Senators Elizabeth Warren (D-Massachusetts) and Chuck Schumer (D-New York) this week.
In a letter to the president, the lawmakers wrote that Biden should immediately cancel up to $50,000 of student debt per borrower – a move that would boost the economy and provide a lifeline to the millions of Americans with student loans. The lawmakers emphasized that the president should act with urgency, as student loan payments are due to restart in three months.
“Canceling $50,000 of student debt would give 36 million Americans permanent relief and aid the millions more who will eventually resume payments their best chance at thriving in our recovering economy,” the lawmakers said. “In light of high COVID-19 case counts and corresponding economic disruptions, restarting student loan payments without this broad cancellation would be disastrous for millions of borrowers and their families.”
Data released on Thursday shows that the U.S. economy was on an upswing last year despite the pandemic; restarting student loan payments could impede that process. The data also demonstrates that the payment pause, which was in place for all of 2021, didn’t stop the economy from beginning to recover from the impact of the pandemic.
Meanwhile, resuming payments will have an enormous impact on many borrowers’ lives. Thousands of borrowers have reported that student loan payments take a large portion of their income, making it difficult to afford bills and essentials. A recent report for Warren and Schumer found that borrowers will lose out on $85 billion annually once loan payments resume.
The burden of student debt is holding back nearly an entire generation from being able to make financial decisions freely, even impeding upon borrowers’ ability to buy a house. Canceling this debt could raise homeownership rates and credit scores; such a move would also likely result in a higher gross domestic product (GDP).
“[T]he enduring weight of student loan debt has negated opportunities for many borrowers to truly transform their lives and our country,” the lawmakers wrote. “More than 80 percent of borrowers with student loan debt report that it holds them back from being able to afford a home. Without this debt, many would be in a better position to begin saving for homeownership as well as retirement and starting a business.”
The lawmakers also urged Biden to release a memo assessing the legality of canceling student debt via executive order. Although the Education Department prepared the memo in April, the administration refused to publicly acknowledge it for months. Ultimately, the existence of the memo was uncovered by the Debt Collective through a Freedom of Information Act request, but the contents of the document were completely redacted.
“Publicly releasing the memo outlining your existing authority on cancelling student debt and broadly doing so is crucial to making a meaningful difference in the lives of current students, borrowers, and their families,” the lawmakers wrote. Debt activists have also been organizing efforts to pressure Biden on the issue.
The Biden administration’s refusal to release the memo has led debt activists to speculate that the document confirms that the president has the legal authority to cancel student debt with a stroke of his pen – but that he doesn’t actually want to do so.
On the campaign trail, Biden promised to cancel up to $10,000 in student debt per borrower, a promise he has repeatedly come under fire for breaking. Last week, Biden dodged a question from a journalist who asked him about his plan to cancel student loans during a press conference; the president answered a second question from the reporter, said nothing about the student loan question and promptly left the conference.
Many progressives and activists say that even cancelling up to $10,000 of debt per borrower wouldn’t be enough. Student debt cancellation advocates like Sen. Bernie Sanders (I-Vermont), who signed on to the Democrats’ letter this week, have encouraged Biden to cancel student debt completely.