Student debt cancellation advocates encouraged by Biden, others remain skeptical

Student loan cancellation advocates are encouraged by recent moves by the Biden administration that signal he may act on eliminating some college debt for individual borrowers, but others remain skeptical that action will be taken on the matter during his first term.

Supporters of forgiving some student loan debt welcomed a recent announcement by Education Secretary Miguel Cardona that a fierce critic of the student loan industry, Richard Cordray, would head the department’s office that oversees the loan portfolio.

Cordray, a former Consumer Financial Protection Bureau (CFPB) director, was recently named chief operating officer of Federal Student Aid at the Education Department.

Manju Bangalore, a student debt campaigner at the Progressive Change Campaign Committee, said Cordray’s appointment was promising.

“We believe he will stand up for student borrowers as he did in his position at CFPB. The time is now to cancel $50,000 of student debt, and we look forward to Cordray being in the mix on this issue,” Bangalore said.

The American Civil Liberties Union also praised Cordray’s appointment. The organization’s senior campaign strategist, Rakim Brooks, urged Cordray to cancel $50,000 of debt in an effort to help minority communities. 

“Canceling $50,000 in student debt would help close the racial wealth gap and support financial freedom for Black and Latinx borrowers who are disproportionately burdened by student debt, all while addressing this debt crisis for millions more,” Brooks said.

But Biden has said that he won’t work toward canceling up to $50,000 in student loans, a favored amount being pushed by progressives, instead promising only to try to reach $10,000 per borrower. 

The movement pushing for student loan cancellation also has a fierce advocate in Senate Majority Leader Charles Schumer (D-N.Y.).

Schumer reiterated his call for student loan cancellation this month in a fundraising pitch, saying, “Biden has the authority to cancel $50,000 of student debt per person with the flick of a pen. And [Sen.] Elizabeth Warren and I are leading the charge to get him to do it.”

“Canceling student debt is the one thing we can do right now that will jump start our economic recovery, help build long-term economic opportunity and close the racial wealth gap. Student debt disproportionately hurts people of color,” Schumer said in the pitch. 

But the prospects of progress on the matter during Biden’s first term are still slim. The White House has said no decision has been made on whether the president can take unilateral action to cancel some student loan debt after it requested information from Cardona on his legal authority.

Debra Dixon, principal at Ferox Strategies and a former chief of staff at the Department of Education’s Office of Planning, Evaluation and Policy Development under former President Obama, said the move to request information was “methodical.”

“President Biden seems to be a very methodical person and methodical president, so I think he’s made the first moves saying, ‘Hey, is there something I can do here?’ And if the answer is no — I think people predict the answer is no and he’s going to need Congress to act — the ball will be in Congress’s court,” she said.

Robert Moran, a former GOP education policy director for the Senate, Health, Education, Labor and Pensions Committee, said absent a decision on whether Biden or his administration has the authority to cancel loans, it’s likely to be rather silent on the matter.

“Until they get a resolution on what the president and the administration can do, or the secretary on behalf of the president, I don’t think they’re going to make a lot of noise on relief,” Moran said.

Moran, who was also a former senior adviser in the Education Department under former President George W. Bush and now a principal at Bose Public Affairs Group, argued even the $10,000 would need to come from congressional action.

“Biden’s saying $10,000 is enough but you, Congress, have to give it to me. He’s always turned it back to Congress,” he said.

With an evenly split margin in the Senate, all 50 Democrats and 10 Republicans would need to agree to reach a 60-vote threshold to pass legislation that tackles some amount in cancellation for it to bypass the legislative filibuster.

“I take it at his word that he wants to start at $10,000. Would Congress pass a bill? Do they have the votes to pass legislation with a higher number? I would doubt that,” Dixon said. “But at this point, I’m not surprised that they’re starting high and that’s where their advocates are and their champions are.”