Obama Education Secretary Says Biden Should Cancel Student Debt

Topline

Inaction by the Biden administration on canceling student loans would cause “tremendous disillusionment” from voters who are crucial to the Democratic Party, former Education Secretary John King warned in an interview published Friday, amid growing pressure on the White House from many Democrats to at least partially cancel federal student debt.

Former Education Secretary John King said in an interview published Friday that the Biden … [+] administration should forgive student loans. (Photo by Pat Greenhouse/The Boston Globe via Getty Images)

Boston Globe via Getty Images

Key Facts

Asked what would happen if President Joe Biden doesn’t cancel student debt, King told CNBC, “There would be tremendous disillusionment from key constituents who are crucial for the health of the Democratic Party.”

King, 47, served as Education Secretary from 2016 to 2017, and is currently running for governor of Maryland.

King said it was within the scope of Biden’s ability to cancel student loans—without Congress—thanks to “a process for debt cancellation” introduced by the Obama administration, apparently referring to power granted to the Education Secretary to waive or modify student loan debt in certain cases, such as the closure of an institution or if students were misled by colleges and universities about job prospects.

Student loans totaled $1.75 trillion as of the fourth quarter, up around 90% in 10 years, according to the Federal Reserve Bank of St. Louis.

On his campaign website, King refers to student loan debt as a “crisis” that disproportionately affects people of color.

Last month, the Biden administration canceled $415 million of student loans for nearly 16,000 borrowers who attended for-profit schools, the Department of Education said in a statement.

Big Number

62%. That’s the percentage of Americans who were in support of some sort of student debt forgiveness, according to a Morning Consult poll conducted in December. Around 28% out of 2,000 registered voters surveyed opposed any debt forgiveness.

What We Don’t Know

If Biden has the authority to cancel student debt. House Speaker Nancy Pelosi said in a press conference in July that Biden does not have the authority to cancel federal student loan debt, and that it could only be done through Congress.

Chief Critic

Reps. Ted Budd (R-N.C.), Warren Davidson (R-OH), Scott Perry (R-Pa.) and Barry Loudermilk (R-Ga.) sent a letter to Education Secretary Miguel Cardona in September, urging him to oppose the Biden administration’s efforts to forgive student loans through “unlawful executive action.” They said Congress provides “limited and explicit authority” to the Education Secretary to “compromise, waive or release any right, title, claim, lien or demand” of student loan balances under certain circumstances, such as the death of the borrower, but there is “no unilateral authority to do so for all student loan balances as a general rule.”

Key Background

The Biden administration is under growing political pressure to forgive at least a portion of federal student debt. King joins many Democrats, including Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Bernie Sanders (I-Vt.), and NAACP President Derrick Johnson who have consistently urged Biden to erase student loans. Around one in eight Americans have outstanding student debt. Biden mapped out a higher education plan on the campaign trail, vowing to forgive all student debt for borrowers who have kept up with payments for 20 years.