Biden Should Cancel Student Debt

The Point

43 million people face difficulties buying homes, starting businesses, completing their education, or supporting their families because of federal student loans that collectively amount to $1.57 trillion of debt. Biden can get rid of it entirely.

Biden should use his executive power to cancel student debt:

• Those who create debt have the power to cancel it. The president oversees the Department of Education and the Department of Education manages public student loan debt. The Great Democracy Initiative recently explained how the DOE could cancel all public student loan debt—which makes up 92% of U.S. student loans—without waiting for Congress by exercising its power to “‘compromise, waive, or release’ its claims over student debtors.”
• Biden’s current plan is not good enough. Elected officials, economists, and advocates have been pushing to cancel $50,000 of a person’s total public loan debt, while a growing movement is calling for the cancellation of all student debt. Cancelling only $10,000, as Biden has proposed, will not address the gravity of this crisis.
• Biden has the power and responsibility to cancel student debt, as Philadelphia City Councilmember Kendra Brooks emphasized in a recent interview with The Cut: “He can do this. And so if he doesn’t, it’s a choice. Cancelling student debt is a winning issue. It’s popular with one in five Trump voters. Forty percent of Black voters said they would consider sitting out the next election if he doesn’t cancel it. He’s promised an FDR-style presidency. He needs to deliver it.”

Cancelling student debt is a racial and economic justice issue:

• Student loan debt disproportionately affects Black and Latinx people. They must take on more debt to go to college and end up earning less when they graduate. Economic scholars Naomi Zewde and Darrick Hamilton recently wrote a New York Times op-ed explaining that full student loan cancellation would “begin to address the added burden that a long history of discriminatory policy places on borrowers of color, and Black borrowers in particular.”
• The average student loan payment is $400 and people spend 20 years, on average, paying off their student loans. Cancelling student debt would put needed money in the pockets of those who are struggling financially.
• Student loan debt doesn’t just affect younger people. Three million senior citizens are currently saddled with student loans; those aged 60 to 69 owe a total $85.4 billion in student debt, according to Forbes. 
• President Biden has rooted his opposition to cancelling student loan debt in his belief that it would disproportionately benefit students who attend elite private schools—but that isn’t true. According to CNBC, “graduates of wealthy Ivy League schools…are often among the students with the lowest amounts of student debt owed due to well-funded student aid programs.”  

Dive Deeper:

• How COVID-19 Has Exacerbated the Student Debt Crisis. Millions of Americans were struggling with student debt before the COVID-19 economic crisis. Now, Colorado State Senator Steve Fenberg and State Representative Leslie Herod join The Briefing to discuss their efforts to provide relief.
• What Biden Can Do To Address The Student Debt Crisis. Civil rights organizations and Democrats in Congress are calling on the president-elect to provide relief to millions of borrowers once he takes office.
• The Case For Cancelling Student Debt. In the space of a few years, the prospect of cancelling outstanding student loans has moved from the far-out fringe of higher education policy reforms to the center of the policy debate, and it could become actual executive branch policy in the very near future. President-elect Joe Biden, with authority over the Department of Education, could issue sweeping debt cancellation with a pen stroke, and he should.