This story originally appeared in Common Dreams on April 27, 2022. It is shared here with permission under a Creative Commons (CC BY-NC-ND 3.0) license.
Republican lawmakers on Wednesday inadvertently acknowledged that President Joe Biden has the power to wipe out federal student loan debt with the stroke of a pen, a move the White House is considering amid sustained pressure from progressive advocates and congressional Democrats.
Senate Minority Whip John Thune (R-SD) unveiled a bill that would constrain the executive branch’s ability to provide relief to federal borrowers by taking away the Secretary of Education’s unilateral authority to cancel outstanding loan balances, limiting the amount of time a presidential administration can suspend payments while adding congressional oversight to the process, and excluding people above a certain income threshold from potential benefits.
Although the legislation has virtually no chance of passing and is intended to be a vehicle for the GOP’s widely debunked talking point that reducing or eliminating student debt would be a “fiscally irresponsible… bailout [of] high-income earners,” The American Prospect‘s David Dayen responded to its introduction by asking, “Aren’t Republican senators admitting that student debt cancellation is within the authority of the president?”
Thune’s bill, co-sponsored by Republican Sens. Bill Cassidy (LA), Richard Burr (NC), Mike Braun (IN), and Roger Marshall (KS), comes just one day after multiple news outlets reported that Biden is exploring options for canceling at least some federal student debt after he extended the repayment moratorium through Aug. 31.
The Federal Reserve Bank of New York recently estimated that the two-year pause on student loans held directly by the federal government, first enacted at the start of the Covid-19 pandemic and extended multiple times by the Trump and Biden administrations, has saved nearly 37 million borrowers almost $200 billion collectively through April.
While welcoming Biden’s fourth extension of the payment and interest rate freeze earlier this month, progressives stressed that it only postpones economic hardship for millions of borrowers—many of whom are struggling to make ends meet amid widespread price gouging and disappearing federal relief programs.
A new survey released last week found that over half of student loan borrowers in the US would not currently be able to make a single monthly payment—the national average is estimated to be $460—if they were required to.
It has been more than a year since the Biden administration received a memo from the Department of Education (DOE) outlining the extent of his authority to broadly cancel federal student debt without legislation. Despite repeated demands from dozens of Democratic lawmakers, Education Secretary Miguel Cardona has not yet made the concealed memo public.
Section 432(a) of the law states that the education secretary has the authority to modify loan terms and “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption”—a provision the DOE has invoked to unilaterally eliminate more than $17 billion in student debt for hundreds of thousands of borrowers in the past year.
The Debt Collective has drafted an executive order for the president directing Cardona to “cancel all obligations to repay federal student loans,” which would save borrowers hundreds of dollars per month and boost the nation’s gross domestic product by more than $173 billion in the first year alone.
Recent polling shows that a majority of adults in the US, including those without education loans to repay, support student debt cancellation. Demands for action are especially pronounced among young voters.
Uncertainty over what Biden—who has yet to fulfill his modest campaign promise to eliminate up to $10,000 of debt for certain borrowers—may do to address the student debt crisis comes as Democrats face a looming battle for control of Congress in this year’s midterm elections.
Many Democratic lawmakers have urged the White House to wipe out at least $50,000 per federal borrower while economic justice advocates continue to call for the cancellation of all outstanding federal student debt as a step toward free higher education for all.
Biden’s approval rating among people under the age of 35 has plummeted during his time in office, a collapse that political observers have attributed to the Democratic Party’s failure to advance downwardly redistributive policies through legislative or executive channels.
“Inaction is going to be really dangerous for us in the midterms,” Rep. Ilhan Omar (D-MN), who has urged Biden to eliminate all student debt, said earlier this month.
“Enthusiasm is really low,” Omar said of Democratic voters. “It’s important to listen to the people who have sent us to represent them… and I know that student debt cancellation is a priority.”