WASHINGTON — President Joe Biden is considering taking executive action to provide federal student loan debt relief to borrowers nationwide as he continues to call on Congress to take action amid the ongoing coronavirus pandemic.
In a post published Thursday on Twitter, White House press secretary Jen Psaki said members of Biden’s team were reviewing his options.
“The President continues to support the cancelling of student debt to bring relief to students and families,” she wrote. “Our team is reviewing whether there are any steps he can take through executive action and he would welcome the opportunity to sign a bill sent to him by Congress.”
The announcement came after Psaki said at a news conference that Biden was “calling on Congress to draft the proposal.” Previously, Biden indicated that he was unsure that, as president, he’d have the power to cancel large swathes of student debt.
“I think that’s pretty questionable,” he said in December, according to Politico. “I’m unsure of that. I’d be unlikely to do that.”
A group of Democrats, including Senate Majority Leader Chuck Schumer, of New York, and Sen. Elizabeth Warren, of Massachusetts, earlier Thursday urged Biden to use executive action to forgive $50,000 in federal student loan debt for each borrower. They framed student loan forgiveness as a social justice issue that would particularly affect students of color and help to close the nation’s racial wealth gap.
“There’s very little that the president could do with the flick of a pen that would boost our economy more than canceling $50,000 of student debt,” Schumer said Thursday at a news conference with Warren and other progressive lawmakers pushing for student debt relief. “This is one of those things that the president can do on his own.”
Republicans have opposed proposals to cancel student loan debt, saying that it unfairly moves the burden from borrowers to taxpayers.
In a hearing Wednesday with Biden’s pick to lead the Department of Education, Sen. Richard Burr, R-N.C., urged the president against pursuing student loan debt forgiveness, which he called “dangerous and foolhardy.” Instead, he called for Biden to work with senators to pass legislation “that dramatically simplifies student loan repayment options, allows borrowers to pay whatever they can reasonably afford, capped at 10% of their discretionary income, and have their loan forgiven after 20 years.”
Economists have also questioned whether a move to cancel student debt would have the desired effect. An analysis released in October by the Brookings Institution found that nearly 60% of outstanding education debt was owed by people with household incomes over $74,000, while the lowest-income earners made up just under 20% of the outstanding debt.
In an op-ed published in November, James Looney, a former Treasury Department official and senior fellow at the Brookings Institution, said canceling $50,000 in student loan debt for each borrower would cost an estimated $1 trillion and represent one of “the largest transfer programs in U.S. history.”
“And its largest effect would be to improve the finances of college-educated workers, who have already tended to be winners in an economy marked by ever-rising inequality,” he wrote.
Calls for debt forgiveness have been mounting following years of college tuition increases that have contributed to ballooning national student debt. More than 43 million Americans owe a total of $1.6 trillion in federal student loans, The Wall Street Journal reported.
In an effort to provide relief soon after the pandemic hit last year, former President Donald Trump’s administration paused federal student loan payments and set interest rates at zero percent. Upon taking office, Biden extended the moratorium through at least Sept. 30.
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