Biden Loans forgiveness: Last year, then-candidate Joe Biden recommended wiping off $10,000 per student debt holder during his presidential campaign. He’s made strides in the forgiveness department since assuming office.
Right away, Biden directed the US Department of Education to draught a memo to determine whether the president had the ability to bypass Congress and wipe off up to $50,000 per borrower—a figure that is far higher than his campaign goal.
Education Loan on Students | Biden Loans forgiveness
Meanwhile, his top education appointee, Education Secretary Miguel Cardona, has approved five rounds of student loan forgiveness totaling $11.2 billion this year, including for disabled and deceived borrowers.
From the outside looking in, it’s tempting to believe that broad student loan forgiveness is on the way. After all, Cardona did declare earlier this week that forgiveness “conversations are ongoing” at the White House. However, education experts tell Fortune something the Biden administration isn’t telling borrowers: broad student loan forgiveness is unlikely in the near future.
For starters, the executive branch is unlikely to have the legal ability to pass extensive student loan forgiveness legislation. While the Department of Education has been able to issue smaller rounds of forgiveness (amounting to less than 1% of the total $1.7 trillion in student loan debt in the United States), those acts are legal since they are just altering or expanding existing forgiveness programs.
Legally, this is considerably different from granting “bulk” forgiveness to all borrowers through executive action. Indeed, House Speaker Nancy Pelosi told reporters last summer that Biden lacked the authority to do so, stating flats that “the president can’t do it…not that’s even a conversation.”
Biden Loans forgiveness administration | Biden Loans forgiveness
However, some higher education policy experts believe that the Biden Loans forgiveness administration may already have the solution. They remind out that in March, White House chief of staff Ron Klain told Politico that a document explaining whether the president has the authority to forgive student loan debt would be ready in “weeks.” Seven months have gone since then, and no memo has arrived.
“The government may not be leading borrowers on,” Carlo Salerno, vice president of research at CampusLogic and a longstanding higher education economist, tells Fortune. “Almost every expert in the field understands that the Department of Education is still researching whether widespread Biden loan forgiveness by executive action is permissible after seven months.”
It’s starting to feel like not closing the door on this [wide student loan forgiveness] is a political move. Why do all of this other loan forgiveness while ignoring the 800-pound animal in the room?
Even some members of Biden’s own political party are beginning to wonder why the document hasn’t been shared by the Department of Education. Rep. Ilhan Omar of Minnesota, along with more than a dozen Democratic colleagues in the House, sent Biden a letter earlier this month requesting the release of the forgiveness memo.
The Democratic lawmakers’ reaction brings up another point in the forgiveness debate.
If the president does not take action to cancel student loans, Congress will have to do so. The latter alternative is unlikely to happen in the near future.
Take a look at the Democrats’ stumbling attempts to pass their $3.5 trillion reconciliation measure. Moderate Democrats, such as West Virginia Senator Joe Manchin, have already succeeded in convincing Democratic leadership to reduce the proposal to $1.75 trillion. To do so, they had to abandon initiatives such as two years of “free” community college and a nationwide paid family-leave scheme.
That begs the question: if Democratic leadership can’t persuade moderates like Manchin to spend $109 billion on “free” community college, how can they possibly persuade them to forgive a large percentage of the $1.7 trillion in student loan debt?