Biden May Cancel Student Debt Soon, Lawmakers Say After Meeting

Topline

President Joe Biden appears poised to likely cancel at least some federal student debt for millions of Americans, he signaled to lawmakers this week according to multiple reports, after White House Press Secretary Jen Psaki said Monday the president is set to decide by August whether to take action on student loan forgiveness.

Activists protest outside the White House to “Cancel Student Debt” on March 15 in Washington, DC.

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Key Facts

Biden suggested to members of the Congressional Hispanic Caucus Monday he’s strongly considering taking action “soon” to relieve student loan debt, according to lawmakers cited by the Washington Post and CBS News.

The White House is “looking at different options on what they can do” on forgiving debt “entirely,” one lawmaker told CBS.

Rep. Tony Cardenas (D-Calif.) told the Post that the president was “incredibly positive” about the idea of canceling at least $10,000 in debt per person by executive order, and aides cited by the Post said Biden told lawmakers they’d be “very happy” with his actions.

Biden is looking at taking action on student loans “sooner rather than later,” Rep. Darren Soto (D-Fla.) told the Post, though he said the timing was a sensitive issue so that the move won’t further affect inflation.

The reports come after Psaki told reporters Monday that Biden “would make a decision about any cancellation of student debt before” the government’s pause on student loan repayments ends, which is set for August 31.

What We Don’t Know

Exactly what any action on student debt cancellation will look like. Biden has supported canceling $10,000 in debt per person since he was on the campaign trail, but CBS reports Biden gave lawmakers the impression Monday his administration is exploring if they could go even further.

Crucial Quote

“I feel very confident that he is pushing on his team to do something, and to do something significant” on student loan cancellation, Cardenas told the Post.

What To Watch For

If Biden does pass an executive order canceling student debt, it’s likely the issue will get tied up in court, as legal experts have questioned the president’s authority to wipe out federal debt through executive action. “Ultimately, it would be overturned through this approach,” student loan expert Mark Kantrowitz predicted to CBS, though Democratic lawmakers like Sen. Elizabeth Warren (D-Mass.) have said they believe Biden would have that authority.

Big Number

43.4 million. That’s the number of Americans with outstanding federal student loans as of the first quarter of 2021, according to the U.S. Department of Education. A recent analysis by the Federal Reserve found that $10,000 in student debt forgiveness would totally eliminate debt for 31.1% of borrowers (11.8 million people), and $50,000 in debt cancellation would wipe out 79% of borrowers’ debt (29.9 million people).

Key Background

Student debt relief has become a major political issue for Democrats, and Biden has already taken steps to address the issue like repeatedly extending the pause on student loan payments and expanding student loan forgiveness programs to include more borrowers. The president has come under increasing pressure to go even further, however, as Democratic lawmakers including Warren and Senate Majority Leader Chuck Schumer (D-N.Y.) have ramped up their calls in recent months for Biden to address student debt cancellation before the midterm elections and the moratorium on payments expires.