Student loan forgiveness: 'Momentum is growing' to persuade Biden, Pressley claims

·3-min read

Prominent Democratic lawmakers continue to push for student loan forgiveness amid the pandemic payment pause, and one lawmaker argued that "momentum" for broad-based action is building.

"The authority is there, the momentum is there," Representative Ayanna Pressley (D-MA) said during the "State of Student Debt Virtual Summit," a conference hosted by the advocacy group Student Debt Crisis Center. 

Pressley added: "Canceling student debt by executive action is one of the most effective ways that we can provide sweeping relief to millions of families. We can help reduce the racial wealth gap, we can stimulate the economy, and we can begin the groundwork for an equitable and just longterm recovery."

Screenshot from The State of Student Debt Virtual Summit.
Screenshot from The State of Student Debt Virtual Summit.

Senators Chuck Schumer (D-NY), Elizabeth Warren (D-MA) and Pressley have repeatedly urged President Biden to use executive authority to forgive up to $50,000 for the roughly 45 million Americans who hold federally-backed debt. Pressley claimed that "a record number" of more than 80 members of Congress were "joining us in our calls."

"This is evidence that momentum is growing, and it is on our side," Pressley reiterated.

Biden administration has canceled $9.5 billion in student debt so far

Federal actions amid the pandemic led to roughly $100 billion in total student loan forgiveness between March 2020 and September 2021, according to Education Department (ED) data and analysis from experts.

The Biden administration recently extended the pause through January 2022.

ED's head of student loans, Richard Cordray, COO of Federal Student Aid, also recently stated his agency's intention of making sure the end of the payment pause on student loans on January 31 next year is carefully managed.

The pause is evidence that Biden can cancel debt, Warren argued. 

Screenshot from The State of Student Debt Virtual Summit.
Screenshot from The State of Student Debt Virtual Summit.

"President Biden could [enact debt cancellation] with the stroke of a pen. In fact, the truth is, he's already gotten started," she explained. "During this pandemic, both President Trump and President Biden have canceled more than $80 billion in student loan interest and debt, while payments have been paused."

Echoing what Pressley previously argued, Senators Schumer and Warren stated that the ongoing pause does not go far enough.

"Students don’t need their debt paused, they need it erased," Schumer said. 

The Biden-era Education Department has so far canceled billions of dollars in debt of particular borrowers including those who had been defrauded by certain for-profit colleges and debtors who are totally and permanently disabled.

That policy "is a step in the right direction, I’ll grant that, but in the grand scheme of things, it falls very, very short of what we wish to see," Schumer added. "It’s not enough." 

Warren agreed: "It is a good start — yay — but it is not enough."

Warren also argued that the language in the Higher Education Act of 1965 "is clear. The President has the power to cancel and modify student debt and he's been doing it. Now it's just a matter of having the will to get the job done right."

The basic argument for the president to being able to forgive student debt through executive action, as detailed by the Legal Services Center of Harvard Law School in a letter to Warren's office, is that the Education Secretary has the power “to cancel existing student loan debt under a distinct statutory authority — the authority to modify existing loans found in 20 U.S.C. § 1082(a)(4).”

Schumer noted that "in the months ahead, I’ll continue pushing the president to take action to cancel student loan debt. I believe he has the authority to do it right now."

Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

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