Biden aims to quell the college affordability crisis but continues to resist pressure from Democrats to cancel $50,000 in student debt by executive order.

Biden Won't Cancel Student Debt by Executive Order


  • Biden recently announced he has no intention of forgiving $50,000 in student loan debt.
  • However, the president continues to support canceling $10,000 per federal student borrower.
  • Biden aims to pass a debt forgiveness bill through Congress rather than by executive order.
  • Instead of helping wealthy grads, Biden wants funds to go toward underprivileged students.

Even before Joe Biden officially became president, a coalition of Senate Democrats and policy groups made a huge request of him on behalf of college students: cancel $50,000 of every federal student loan borrower's debt.

The most progressive Democrats have called for student debt cancellation for years. Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren, along with lawyers from Harvard's Project on Predatory Student Lending, say the president wields the power to cancel the debt with the stroke of a pen. Meanwhile, lawyers in the Trump administration's Department of Education disagree.

Although Biden used his executive power to extend the moratorium on student loan collection, he will not use it to write off $50,000 per student borrower. The president directly addressed the debate over student debt cancellation for the first time at a CNN town hall on February 16 in Milwaukee.

“I understand the impact of the debt, and it can be debilitating. … I do think that in this moment of economic pain and strain that we should be eliminating interest on the debts that are accumulating.”

President Joe Biden, February 16, 2021

When asked by an audience member to follow through on the proposed $50,000 in debt relief, Biden replied, "I will not make that happen." Explaining that he did not think he had the authority to cancel $50,000 for every student borrower, the president said, "I'm prepared to write off $10,000 [in] debt, but not $50[,000]."

Biden supports forgiving the first $10,000 in borrowers' student debt as a pandemic relief measure, as well as other big-ticket legislation, like the $1.9 trillion relief package making its way through Congress. Any large-scale debt forgiveness, according to Biden, would similarly need to pass through Congress. Congress-passed legislation is also harder to reverse than an executive order.

While Democrats hold a slim majority in the Senate, not all support the call for widespread debt forgiveness. Of the Senate's 50 Democrats, just 16 co-sponsored Schumer and Warren's resolution calling on the president to cancel $50,000 per borrower.

Who Would Benefit Most From Student Debt Forgiveness?

Around the turn of the millennium, middle- and upper-class households helped drive up a huge increase in annual student borrowing. Nevertheless, low-income households take out loans more frequently, accumulate debt the fastest, and struggle the most to repay debt. The median student loan debt among the poorest borrowers recently crested $30,000.

Even low levels of debt can wreak havoc on the financial present and future of underprivileged college students. Markers of financial distress, such as late payments and delinquencies, spike around the $2,000 level in loan payments.

Markers of financial distress, such as late payments and delinquencies, spike around the $2,000 level in loan payments.

The $10,000 student debt forgiveness proposal would erase these smaller balances, which account for about 60% of all defaults. The $50,000 proposal would erase the debt of some 84% of federal student loan borrowers — but middle-class families could benefit the most.

Over half of all student debt is owed by individuals with master's or professional degrees, the majority in lucrative fields like medicine, law, and business. Nearly 35% is owed by the top 20% of earners.

Rather than canceling the debt of wealthy college graduates who went to "Harvard and Yale and Penn," Biden says the cost to the federal government should go toward other needs, such as providing early education for disadvantaged students, increasing funding for HBCUs, and making community college free for all and four-year college free for most.

Does Biden Wield the Power to Cancel Student Debt?

Some legal experts argue that the president and the Department of Education (ED) possess the power to cancel student debt. The ED already cancels student debt in specific instances, including for veterans with disabilities and for students defrauded by for-profit universities. Broad student debt cancellation, however, would be unprecedented.

Student financial aid expert Mark Kantrowitz told CNBC that attempting to forgive debt by executive order would likely meet with a lawsuit. In a memo to former Secretary of Education Betsy DeVos, ED lawyers contend that the department "does not have the statutory authority to cancel, compromise, discharge, or forgive" student loan balances across the board.

Even after Biden confirmed he has no intention of canceling student debt by executive order, Senate Democrats and progressive groups hold out hope that the president will come around. Schumer and Warren insist that the Higher Education Act gives Biden the authority to cancel student loan debt, and point out that former presidents Barack Obama and Donald Trump have used the act for this very purpose.


Feature Image: Drew Angerer / Staff / Getty Images News / Getty Images North America