Is Biden really going to cancel your student loans? Here’s what policy insiders are saying

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BY Lake SydneyFebruary 28, 2022, 10:42 PM

President Joe Biden speaks at an event to celebrate Black History Month in the East Room of the White House in February 2022.

Brendan Smialowski—AFP/Getty Images

Campaigning, then presidential candidate Joe Biden said, “We should cancel a minimum of $10,000 per person in federal student loans.” More than a year after taking office, Biden has yet to deliver on that pledge, but he has forgiven more than $15 billion in student loan debt.

It doesn’t really take a major crack in the student debt crisis, however, as more than 43 million borrowers currently have federal student loans totaling over $1.61 trillion.

So far, student loan forgiveness has been given to targeted groups of borrowers, including people with disabilities, students who have been defrauded by their colleges, and some borrowers who work in government. Student loan payments have also been suspended for all federal borrowers since March 2020 under the CARES Act, but these are expected to resume in May.

Are the breaths of top Democrats, including Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren and U.S. Representative Alexandria Ocasio-Cortez, wasted? In other words, will Biden ever really forgive student loans en masse like he said he intended to do during the campaign?

“It’s hard to say, because pressure is mounting from Democrats as well as activists, both as the end of the moratorium draws near again and inflation continues. This does not take into account the impact that the war in Ukraine could have,” says Elizabeth Tandy Shermer, author of Students under contract: How government-backed loans left generations drowning in college debt.

Biden has remained silent on the subject; in fact, he ignored a question about debt forgiveness posed by a reporter at a press conference in January 2022. But some student loan experts say a mass forgiveness could still happen.

“We envision 2022 as the year large-scale debt cancellation becomes a reality, and we urge President Biden to use his authority to sign executive action to that end,” Cody Hounanian, Executive Director of Student Debt Crisis Center, previously said Fortune. “After some resistance, the President extended the pause on federal student loans through May 1. This is a positive sign that the administration has a better understanding of the borrower experience and the barriers they face.”

Biden’s power to cancel debt

One of the questions that arises regarding federal student loan debt forgiveness is whether Biden actually has the power to do so through an executive order.

“I don’t think I have the power to do that by signing [an executive order]Biden said during a town hall on CNN on Feb. 17, 2021. House Speaker Nancy Pelosi also said she doesn’t believe Biden has the power to cancel student debt by executive order.

Other top Democrats like Schumer disagree, saying Biden can do it with a “stroke of the pen.”

While Biden doesn’t think he can forgive student loan debt through an executive order, other student debt experts note that it could be accomplished through an act of Congress. Congress is more likely “now than before” to pass legislation that would implement massive student debt cancellation, Mark Kantrowitz, author of How to apply for more college financial aid, already said Fortune.

“With a conservative Supreme Court, the idea that he could undo all or even a significant portion with the stroke of a pen is more of an ambitious statement than one that would likely hold up,” Travis Hornsby, founder of Student Loan Planner, argues. “Therefore, we do not expect meaningful action on this.”

Shortly after Biden’s 2021 CNN mayoral comments, White House Chief of Staff Ron Klain said Biden had directed the education secretary to explore whether the executive branch had the power legal to cancel student loan debt. At the time, the memo was promised to be released within weeks.

The full memo has yet to be released, but the new yorker in October 2021, first reported that a heavily redacted version existed. This version doesn’t show much other than the fact that the White House had the memo for over six months without releasing any information to the public.

“With the current composition of the Supreme Court, my sketchy thought is that I would put the odds of you, the borrower, getting an actual reversal beyond what has already happened as very low,” adds Hornsby.

What Biden could do

Given what the Biden administration has done so far, it’s possible we could see more targeted rounds of student loan forgiveness in the future.

“The Biden administration has a real track record now that we can watch and know what they think about providing student loan relief,” Andrew Pentis, a certified student loan counselor with Student Loan Hero, previously said. . Fortune. “This is a record of relief targeted at specific borrowers, not the mass forgiveness proposals that many progressives have been calling for.

However, mass forgiveness “doesn’t seem likely without sustained pressure,” Shermer says.

“It will really depend on continued pressure from voters, party members and the many pundits who have pointed to the immediate benefits of cancellation; especially to borrowers of color – women in particular – who are having the hardest time repaying their debt, even without the recent pressure of inflation as well as the effects of economic sanctions on Russia,” she adds.

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