President-elect Joe Biden will ask Congress to cancel $10,000 in student debt for all borrowers and to extend the payment pause scheduled to end this month.
The former vice president noted that the $900 billion stimulus package passed last month does not include an extension of the payment pause that has been in effect since March 2020. That has concerned advocates who say most student debt borrowers will be unable to make the payments due to the pandemic.
According to a Pew research survey, 60% of student debt borrowers said it would be difficult to start making payments again. CNBC reported less than 15% of student debt borrowers have continued to make payments.
Biden is also pushing Congress to cancel $10,000 in student debt from all borrowers. However other lawmakers, such as Sens. Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) not only want Biden to go further but to bypass Congress to do so. Sen Chuck Schumer (D-NY), who will soon become speaker of the House, wants Biden to cancel $50,000 in student debt for every borrower on his first day as president.
“We have come to the conclusion that President Biden can undo this debt, can forgive $50,000 of debt the first day he becomes president,” Schumer told reporters in December . “You don’t need Congress; All you need is the flick of a pen.”
Student debt is currently the second-highest debt in the U.S. at $1.4 trillion dollars. Only home loans are higher.
Critics of widespread college loan debt forgiveness say that it would unfairly benefit those with college degrees, who typically make more than those without a degree. However Sen. Warren called student loan debt forgiveness “The single most effective economic stimulus that is available through executive action,” last month.
“All on his own, President-elect Biden will have the ability to administratively cancel billions of dollars in student loan debt using the authority that Congress has already given to the secretary of education,” Warren said during a Senate Banking Committee hearing in December.
However, some legal experts say any executive action by Biden is likely to run into several court challenge. Although Biden has the majority in Congress, it’s thin enough that if one or two Democrats or a group of Republicans oppose, it could kill the bill.