Can Joe Biden Cancal Have Student Loan Debt?

It’s been over a year since President Joe Biden took office and he still hasn’t followed through on a big campaign promise: Tackle the student loan crisis.

Asked about the issue at a two-hour press conference on Wednesday, Biden dodged the question. The reporter asked if Biden would act on a plan he outlined during his campaign that included at least $10,000 in outright debt cancellation per student.

The president did not remain totally silent on the issue, saying instead that it was up to Congress to act. Biden still supports cancellation. Earlier this month, his administration extended a federal loan payment freeze in the event of a pandemic for around 41 million borrowers through May 1. But critics say the measure falls far short of addressing the roughly $1.7 trillion debt burden that has weighed on the economy, preventing a generation of Americans from buying homes and starting families. . Congress also refused to take up the matter, referring the matter to the White House.

So can the president, using his executive power, forgive student loan debt?

Thomas J. Vicino, Associate Dean of Graduate Studies and Professor of Political Science, Public Policy, and Urban Affairs at Northeastern, poses for a portrait. Photo by Alyssa Stone/Northeastern University

“It depends”, says Thomas J. Vicino, associate dean of graduate studies and professor of political science, public policy and urban affairs at Northeastern. “It’s an open legal question. The president’s executive power is usually quite broad, and obviously some Democrats have said, yes, he has the power. »

It’s unclear how debt cancellation would work, Vicino adds. It’s unclear, for example, whether cancellation means the banks disbursing the loans would be repaid, the government — and, therefore, taxpayers — footing the bill, or whether the debt can simply be written off. Democratic lawmakers insisted that Biden has the power to write off debt, urging the president to do so for amounts up to $50,000 per person.

Borrowers and supporters of debt cancellation have been vocal in calling on the president to keep his promise. Biden’s hesitation only underscores how politically sticky the subject has become amidst the divisions within one’s own party on a number of his administration’s legislative priorities, which comes in a pivotal election year that could see Democrats lose their narrow majorities, Vicino says.

“Whether or not the president has power is an important legal question, but the political question of whether he should using that power is what’s at stake here,” Vicino says.

Of course, the emerging debt issue is not going away. Vicino says this has been a crisis in the making for years, one comparable to the housing crash of 2008. Like the housing crash, growing student debt, sometimes from predatory lenders, is harming disproportionately to people of color and other marginalized populations. The COVID-19 pandemic, which has led to economy-wide disruptions, has only made matters worse.

“There is an economic imperative to act,” says Vicino.

“Right now, student loan debt is so large that it makes achieving the middle-class American dream virtually impossible,” he says. “It’s putting home ownership out of reach because the costs of buying a home and having kids right now are astronomical. For most people under 40, these decisions are postponed and delayed due to student loan debt.

The ongoing payment freeze has saved borrowers some $5 billion a month, according to the US Department of Education. The vast majority of borrowers took out federal loans through the government’s student aid program, with only 8% pursuing private options.

Biden asked the US Department of Justice to review its debt forgiveness powers. The review is in progress.

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