'I’m going to get in trouble for saying this': President-elect Biden disputes Democratic debt cancellation plan
President-elect Joe Biden cast doubt on a popular Democratic idea involving executive action that would cancel up to $50,000 in federally-held student loan debt for roughly 43 million American borrowers.
"I’m going to get in trouble for saying this," Biden told a meeting of news columnists on Wednesday, raising the Democratic argument that "the president may have the executive power to forgive up to $50,000 in student debt. Well, I think that’s pretty questionable. I’m unsure of that. I’d be unlikely to do that.”
Earlier this week, while introducing his nominee for Education Secretary, Miguel Cardona, Biden declared support for forgiving $10,000 in student debt across the board — through legislation passed by Congress.
“It’s a balancing act, but I’m optimistic that we can get a lot of the things that I’d like to do done,” Biden said on Wednesday. “I’ve spent most of my career arguing against the imperial presidency. We got three equal branches of government. I’m confident that there are a number of areas that are of such consequence that they go beyond the partisan boundaries.”
‘Cancel existing student loan debt under a distinct statutory authority’
Consumer advocates and several Democrats — including Senators Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) in addition to Representatives Ayanna Pressley (D-MA) and Ilhan Omar (D-MN) — have repeatedly called for Biden to take executive action on student debt cancellation.
“President Biden can undo this debt — can forgive $50,000 of [student] debt — the first day he becomes president,” Schumer said. “You don't need Congress. All you need is the flick of a pen.”
A new member of the incoming Biden administration’s National Economic Council, longtime Warren aide Bharat Ramamurti, also previously argued in support of the president’s authority to cancel debt.
The basic argument, as detailed by the Legal Services Center of Harvard Law School to Senator Warren, 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).”
Other experts believe that the argument is flawed and would not survive legal challenges.
The offices of Sens. Schumer and Warren did not respond to inquiries about Biden’s latest comments.
Some observers, responding to Biden’s comments, noted that President Trump’s executive actions to impose a moratorium on the interest and payments of federally-held student loan debt amid the coronavirus pandemic were an indication of how executive power can be used to lead legislation.
Student debt forgiveness is a popular idea: A new pair of national surveys, provided exclusively to Yahoo Finance, show that more than half of Americans across the political spectrum support government action to address the student loan crisis, which includes $1.55 trillion in federally-held student debt as of Q3 2020.
Aarthi is a reporter for Yahoo Finance. Follow her on Twitter @aarthiswami.
If you would like to share your story about how you’re struggling or paid off your students, email her at firstname.lastname@example.org
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