Pressures aligning on Biden, Democrats to forgive student loans

Advocates and lawmakers are stepping up the pressure on President Biden to act on student loan forgiveness, focusing on it as a major issue some warn Democrats could pay for at the ballot box in the upcoming midterm elections.

Biden has been called on to work with Congress on the issue and provide more transparency about his authority to wipe out all federal student debt for millions of Americans. The extension once again of the student loan repayment pause amid record spikes in COVID-19 cases made advocates optimistic that more action will come out of the White House. 

“I think the administration needs to engage more with Congress on this because I think there’s real concern,” Sen. Bob Casey (D-Pa.) told The Hill.

Broad-based student loan forgiveness has gained support among Democratic leaders like Senate Majority Leader Charles Schumer (D-N.Y.), who are looking to Biden for support on the issue as the party prepares for a critical election year.

“Pressure is mounting from all fronts. It’s mounting from grassroots, it’s mounting from the public, and it’s mounting from members of Congress. And the reality of the economy, the midterms, there are several pressures that are aligning. They really have to deliver,” said Thomas Gokey, an organizer with the Debt Collective.

Federal student loan payments were first paused under a moratorium enacted under then-President Trump in March 2020. The freeze has been extended several times since under both the Trump and Biden administrations.

Biden last extended the hold last month amid a mountain of pressure from progressives and borrowers to forgo the previously set Jan. 31 date to lift the forbearance on student loans. At the time, Biden extended the temporary pause on federal student loans and interest accrual through the start of May.

A White House spokesperson told The Hill that the extension was a recognition “that while our jobs recovery is one of the strongest ever, millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments.” 

The extension marked a short-term victory for advocates who had been urging Biden to lengthen the pandemic moratorium, while pointing to the surge in coronavirus cases fueled by the spread of the highly contagious omicron variant. 

But the action did little to quell the numerous calls by progressives who have urged the president for months to go further and use his executive power to unilaterally cancel student loan debt.

“If he has the authority to pause student loan payments, he has the authority to cancel, and he ran on canceling at least $10,000,”  Rep. Jamaal Bowman (D-N.Y.) told The Hill. “We’re pushing him to completely cancel it, and that’s what we hope he decides to do.”

Natalia Abrams, president and founder of the Student Debt Crisis Center, warned of the political implications of Biden resuming loan payments in an election year.

“It’s definitely been this weird middle ground by extending this pause. If he continues to extend the payment pause until they’re ready to cancel the student debt, we’ll be OK. Rather than turning payments on in a midterm year when borrowers aren’t ready,” she said.

During his 2020 presidential run, Biden campaigned on forgiving at least $10,000 in federal student loans per person.

The Debt Collective warned that if Biden doesn’t forgive up to $50,000 in federally held student debt per borrower, which progressives have called for, he will lose voters, citing conversations with borrowers on a grassroots level.

“This isn’t just the midterms, this is about the rest of their lives,” Gokey said. “A Democrat couldn’t be elected dog catcher if they turn student loan payments back on.”

But as top Democrats continue to call on Biden to go higher or wipe out student loan debt entirely, disagreements have also bubbled up over whether the president has the power to do just that through executive action.

Lawmakers and advocates have been waiting months to see a memo that Biden requested from the Department of Education in April to determine his authority to cancel student debt.

“I don’t know why it would be held onto this long,” said Abrams. “No matter what side of the aisle you’re on, we all should see that in terms of transparency and that way borrowers and lawmakers can move on appropriately.”

When asked if the Education Department is done with the memo requested by the president, a spokesperson for the agency said it is working with the White House to “review options with respect to debt cancellation.”

“It’s interesting to me that they’re not even acknowledging that they have the memo, that they’ve been sitting on it,” Gokey said, adding that he thinks the president has the authority to forgive student loans.

The White House, when asked for comment on the memo, pointed to steps the administration has taken, like providing nearly $13 billion in targeted loan relief to more than 640,000 borrowers and providing $5.8 billion for permanently disabled borrowers. 

A spokesperson said the White House will “put forth regulatory improvements to income-driven repayment, borrower defense to repayment, and closed school discharges” in the coming weeks and months.

But more than eight months since the memo was requested by the White House, patience has been wearing thin among many borrowers ahead of the upcoming May deadline, adding to concern among lawmakers. 

“I do think they want to make sure that they’re crossing all the T’s and dotting all the I’s because they know there’s gonna be a lot of political pushback on it … I get their apprehension, but they need to move at some point whenever they get a clear determination,” Rep. Ruben Gallego (D-Ariz.) told The Hill.

Sen. Raphael Warnock (D-Ga.) echoed calls by advocates who have pushed for widespread student debt forgiveness as a way to help “address the racial wealth gap,” as data has shown borrowers of color, especially Black and Hispanic graduates, carry a disproportionate burden. 

“If we were able to get some student debt forgiveness package, I think it would go a long way,” he said. “I think it would be a huge lift on the personal economies of these borrowers, but it would be a tremendous lift to the economy.”

Research released by the Brookings Institution in 2016 showed that Black and Hispanic graduates owe more on average than white graduates, and are more likely to default in the four years following graduation. 

A May 2021 analysis from The American Association of University Women also found that Black women owed roughly 20 percent more student debt than white women, carrying a bigger substantial debt burden than other women of color borrowers.

Last year, a Color of Change poll released in February found that 84 percent of Black voters, a voting bloc that was key to helping Biden win the election in 2020, support full or partial debt cancellation. The poll also found that 40 percent of Black voters broadly said they wouldn’t back a candidate that doesn’t support eliminating student debt.

Other polls have also indicated popularity surrounding the push for some form of student debt forgiveness has grown. A recent poll released by the Morning Consult/Politico in December found over 60 percent of voters surveyed support student debt forgiveness.