Senate Majority Leader Chuck Schumer finally admits that Congress won’t cancel your student loans.
Here’s what you need to know.
At a virtual event yesterday hosted by Mitú, a Latino digital media company, Schumer admitted what many have already known: Congress won’t cancel student loan debt. That may come as a surprise, since Schumer (D-NY) — along with Sen Elizabeth Warren (D-MA) — is one of the leading advocates for wide-scale student loan cancellation. Schumer and Warren want student loan cancellation up to $50,000 for student loan borrowers, which the U.S. Department of Education say would cancel all federal student loan debt for 36 million Americans. (Student loan cancellation could cost $1 trillion). So, why won’t Congress cancel your student loans?
“You read about the tough time we’re having with legislation, the bill to build roads, bills to make prescription drug costs lower, the bills to get a tax break and get our kids out of poverty and get them to get a good education, to help small businesses,” Schumer said, as Business Insider reported. “Those all require the House and Senate to pass it but these days, with the partisanship, filibuster and all that, it’s not so easy.”
Student loan cancellation: blame partisan Congress?
Schumer says that “partisanship” and the “filibuster” are reasons why Congress won’t pass student loan cancellation. (Here’s how to get student loan forgiveness). In some ways, Schumer isn’t wrong. Congress is hyper-partisan. Look no further than any major legislation over the past several years, and you’re unlikely to find any legislation on which both parties have united and agreed on spending or policy priorities. Progressives want to cancel all student loan debt, while conservative Republicans want limited federal spending and hence, no student loan debt cancellation. (Pay student loans the old-fashioned way: pay back what you borrowed, Republicans have argued). That said, Congress has passed bipartisan legislation such as the Cares Act — the $2.2 trillion stimulus bill in the wake of the Covid-19 pandemic. Like other stimulus packages, Congress disagreed sharply on the amount of federal relief. However, Democrats and Republicans agreed on historic student loan relief that, with extensions from President Donald Trump and President Joe Biden, will result in $110 billion of total student loan cancellation for student loan borrowers. This is in addition to the $11.5 billion of student loans that Biden cancelled since becoming president. However, while Schumer and other progressives in Congress welcome this student loan forgiveness, they argue it still falls short of cancelling student loans of up to $50,000 for student loan borrowers. To avoid wide-scale student loan forgiveness becoming a victim of partisan gridlock, Schumer turned attention to the president. “The president can do this on his own,” Schumer said yesterday, referring to his belief that Biden has existing legal authority to cancel student loans for all student loan borrowers.
Student loan forgiveness: Democrats don’t want to cancel student loans either
Student loan cancellation isn’t simply a partisan issue. (Student loan forgiveness has one major problem). Democrats and Republicans disagree philosophically and practically on numerous issues related to federal spending. However, there are other important facts that shouldn’t be ignored. Democrats currently control the House, the Senate and the White House. The majorities may be slim, including a 50-50 split in the Senate, with Vice President Kamala Harris able to break tie votes. Republicans don’t support wide-scale student loan cancellation. There are Democrats such as Sen. Joe Manchin (D-WV) and Sen. Kyrsten Synema (D-AZ) who are willing to break with their party and oppose significant federal spending. However, and this may be surprising for many student loan borrowers, there are numerous Democrats besides Manchin and Synema who don’t support wide-scale student loan cancellation. This includes student loan forgiveness of up to $50,000 for student loan borrowers. This also includes student loan cancellation of up to $10,000 for student loan borrowers, which Biden supports. Beyond a core group of progressive legislators, most members aren’t shouting from the halls of Congress that student loan cancellation should be the number one priority. So, mass student loan forgiveness is more than simply a partisan issue. Many Democrats don’t support cancelling your student loan debt either.
Should Biden cancel student loans?
If Congress won’t cancel student loans, Schumer says the solution is for Biden to cancel student loan debt through an executive order. Schumer, who holds a degree from Harvard Law School, and Warren, who taught there, argue that the Higher Education Act of 1964 empowers the president with current legal authority to cancel an unlimited amount of student loan debt for every student loan borrower. Biden, who holds a law degree from Syracuse and served as chairman of the Senate Judiciary Committee, disagrees, and like Speaker of the House Nancy Pelosi (D-CA), has said he doesn’t have the legal authority to cancel everyone’s student loan debt. Biden doesn’t support $50,000 of student loan cancellation and says that he will sign legislation on student loan cancellation when Congress passes a bill. Even if the president had the legal authority to cancel student loans, perhaps there is a question of whether the president should cancel student loan debt. The president has the legal authority to use executive orders to advance his agenda. Removing the substantive policy considerations of student loan forgiveness for a moment, should the president cancel student loans when most of Congress — including many in his own party — don’t support student loan cancellation? Congress is elected to represent the will of the people. While legislators can act independently, they serve the voters who elected them. Legislators are champions of their constituents. If their constituents collectively don’t support student loan cancellation, can Biden in good conscience cancel everyone’s student loan debt through an executive order? For now, Biden has rejected wide-scale student loan cancellation and focused on targeted student loan cancellation. With targeted student loan cancellation, Biden has cancelled student loans under existing law — and therefore avoided prolonged legal challenges that could thwart delivering student loan relief to student loan borrowers in need.
Student loans: next steps
Will Biden cancel your student loans? While the Education Department is exploring wide-scale student loan cancellation, it’s less likely that your student loan debt will be cancelled. Anything can happen in politics, but continued targeted student loan cancellation is more likely. This includes, for example, historic student loan relief for public servants and may include further simplification of income-driven repayment plans, which can lead to student loan forgiveness. Student loan relief is ending January 31, 2022. Student loan forgiveness is important, but so is student loan repayment. Here are some popular options to pay off student loans faster: