President Joe Biden said Thursday he’s considering canceling “some” outstanding federal student loan debt, but ruled out a proposal by some congressional Democrats to cancel $50,000 in debt for each borrower.
“I am not considering $50,000 in debt reduction, but I’m in the process of taking a hard look at whether there will be debt forgiveness, and I’ll have an answer in the next couple weeks,” Biden said at a White House press conference.
Biden’s comment comes a day after Senate Majority Leader Chuck Schumer (D-N.Y.) reportedly said the president is “getting closer” to a $50,000 blanket forgiveness for all borrowers.
“I think the President is moving in our direction. My talks with him and his staff have been very fruitful over the last little while,” said Schumer, reported CNN. “We’re getting closer.”
Schumer has been calling on Biden to use his executive power to erase up to $50,000 in federal student loan debt for all borrowers and to make sure that the cancelled debt won’t be treated as taxable income. Other Democrats, notably Sen. Elizabeth Warren (D-Mass.) and Reps. Ayanna Pressley (D-Mass.) and Ilhan Omar (D-Minn.), have also advocated for $50,000 in debt relief.
Not all Democrats agree with Schumer’s plea. In July 2021, House Speaker Nancy Pelosi (D-Calif.) suggested many taxpayers don’t want their money spent to pay off someone else’s debt. She also argued that Biden doesn’t have the authority to do it.
“People think that the President of the United States has the power for debt forgiveness; he does not,” Pelosi said at the time. “He can postpone, he can delay, but he does not have that power. That has to be an act of Congress.”
Biden has also expressed skepticism about the benefits of Schumer’s plan. In a May 2021 interview with The New York Times, he said he disagrees with “the idea that you go to [University of Pennsylvania] and you’re paying a total of 70,000 bucks a year and the public should pay for that.”
That being said, Biden promised during his 2020 presidential campaign that he would cancel $10,000 debt for each borrower. An analysis by the Federal Reserve Bank of New York says doing so would wipe out a total of $321 billion of federal student loans, eliminate the entire balance for 11.8 million borrowers, and cancel 30.5 percent of loans delinquent or in default prior to March 2020, when the federal government gave all borrowers a payment break and stopped collecting defaulted loans.
If it doesn’t come with an income cap, a $10,000 forgiveness plan would benefit mainly those under the age of 40 who have graduate degrees and live in high-income households of majority-white neighborhoods, according to the analysis.
The U.S Department of Education said it has thus far canceled more than $17 billion in debt for 725,000 borrowers. That includes $6.8 billion for more than 113,000 public servants, $7.8 billion for more than 400,000 people with severe disabilities, $1.2 billion for those who attended now-defunct ITT Technical Institutes, and about $2 billion for 105,000 students who claimed to be defrauded by their school.