President Biden has only canceled a small portion of the student loan debt he promised to cancel during the campaign, but the White House announced this week that a larger forgiveness scheme is still in the works.
Biden’s use of presidential authority to cancel billions of dollars in federal student loan debt is “still on the table,” White House press secretary Jen Psaki said during an interview on “Pod Save America,” and a “decision” could be made in the coming months.
Since Joe Biden became president, “nobody has had to pay a dollar, a cent, or anything in student loans,” Psaki claimed. “And if that can help people manage costs in other parts of life, that’s something to think about. That is a significant factor to consider.”
The suspension on student loan payments, which began early in the outbreak under then-President Donald Trump and was regularly extended by Biden, is set to expire on Aug. 31, 2022. The Education Department has offered $72 billion in interest reduction alone on student loans.
Before the current student debt payment stop ends, Psaki said the Biden administration will decide whether to extend the pay freeze and possibly grant loan forgiveness.
Progressives, notably Senate Majority Leader Chuck Schumer, have asked Biden to issue an executive order canceling $50,000 of outstanding federal debt per borrower.
Biden could utilize existing presidential authority under the Higher Education Act to direct the Department of Education to “modify, compromise, waive, or release” student loans, according to Democratic lawmakers.
During his presidential campaign, Biden advocated for wiping $10,000 in student debt for the majority of students, but his legal authority to do so via executive order has been called into question.
Last year, the president asked the Education Department for a letter to see if he could eliminate student loan debt unilaterally.
Over the last decade, outstanding student loan debt has more than doubled, approaching $1.7 trillion. About one out of every six persons in the United States owes money on federal student loans, which account for the majority of non-mortgage debt in the country. Federal Reserve Chairman Jerome Powell has described it as a substantial impediment to people’s “economic lives.”