Personal Finance

Over 80 lawmakers call on Biden to release memo outlining authority to cancel student debt

Key Points
  • Over 80 House and Senate members wrote a letter to the president urging his administration to release the memo outlining his authority to cancel student debt.
  • The lawmakers, including Senate Majority Leader Chuck Schumer, D-N.Y. and Sen. Elizabeth Warren, D-Mass., also called on the president to immediately forgive $50,000 per borrower.
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Lawmakers urge President Biden to cancel up to $50,000 in student debt

Over 80 House and Senate members wrote a letter to President Joe Biden on Wednesday urging his administration to publicly release the memo outlining his legal authority to cancel student debt.

The president requested the department to prepare that report last year.

The lawmakers, including Senate Majority Leader Chuck Schumer, D-N.Y. and Sen. Elizabeth Warren, D-Mass., also called on the president to immediately forgive $50,000 per borrower. The price tag on such a move would be around $1 trillion and 80% of student loan borrowers, or 36 million people, would have their debt cleared entirely.

Outstanding student loan debt in the U.S. has exceeded $1.7 trillion and poses a larger burden to households than credit card or auto debt. Roughly 10 million borrowers are likely in delinquency or default.

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Since March 2020, when the coronavirus pandemic hit the U.S., the Education Department has paused student loan payments. That relief has since been extended five times and is set to end in May.

The lawmakers said Americans shouldn't be forced to resume the payments.

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"In light of high Covid-19 case counts and corresponding economic disruptions, restarting student loan payments without this broad cancellation would be disastrous for millions of borrowers and their families," they wrote.

Biden has asked both the U.S. Department of Education and the U.S. Department of Justice to prepare memos on his legal authority to cancel student debt. Schumer and Warren have insisted the president has the power to do so. The White House is likely weighing the legal risks of such a move.

Most experts agree that the chances of Congress passing legislation to deliver the relief are close to zero, as even some moderate Democrats oppose loan forgiveness.

A spokesperson for the White House said the president continues to look into what debt relief actions can be taken administratively.  

Yet it's unclear why the reports on the his power to do so haven't been released yet. The lawmakers point out in their letter that the Department of Education has had its memo for nearly 10 months.

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