Will Student Debt Cancellation Happen Under Biden?

• The debate over whether to cancel student debt dates back more than a decade.
• President Biden campaigned on a promise to cancel some debt.
• More than a year into Biden's presidency, few borrowers have benefited from the president's student debt cancellations.

Americans are approaching midterm elections with nearly $1.9 trillion in student loan debt. As that number continues to grow, so do the calls for widespread debt cancellation.

For more than a decade — and three presidents — those calls have fallen on deaf ears. Since taking office in February 2021, President Joe Biden’s targeted cancellations have wiped approximately $16 billion in debt off the books for more than 680,000 borrowers. This includes $7.8 billion for more than 400,000 borrowers with permanent disabilities, plus almost $5 billion for 70,000 borrowers working in the public service sector.

But with more than 45 million Americans still owing on student loans, advocates like the Student Debt Crisis Center say Biden's cancellations have hardly made a dent in the overall debt crisis. Such advocates hope universal federal debt cancellation may still happen in the near future.

Student debt cancellation is sure to be a priority issue in November’s midterm elections, particularly among young Democratic voters. These voters ranked eliminating student debt as a high priority heading into the 2020 election.

The Latest News on Possible Debt Relief

After campaigning on a promise to cancel up to $10,000 per person in student debt, Biden has been fairly quiet on student debt cancellation since taking office.

Shortly after Biden assumed the presidency, White House Chief of Staff Ron Klain said the president asked the Department of Education (ED) to look into whether he could cancel student debt through executive order. The administration has yet to release an update. A heavily redacted memo surfaced in November 2021, offering little insight into the president's executive ability to forgive student debt.

Klain last week broke the administration's silence on the issue in an interview on the podcast Pod Save America.

"The president is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause," Klain said. He added that Biden will make a decision on whether to use executive action to cancel student debt before payments resume.

Those payments are scheduled to resume on May 1, unless the pause is extended again.

Many U.S. representatives and senators have continued ringing the bell on debt cancellation. As recently as Jan. 26, a group including Senate Majority Leader Chuck Schumer of New York, Sen. Elizabeth Warren of Massachusetts, and Rep. Alexandria Ocasio-Cortez of New York addressed a letter to the president.

The letter, signed by 85 lawmakers, urged Biden to cancel up to $50,000 in student debt per borrower.

Targeted Student Debt Cancellation Moving Forward

Biden’s Department of Education has slowly approved about $2 billion in debt cancellation through borrower defense claims. These apply to students whose schools misled them or engaged in other misconduct violating certain state laws.

According to ED, more than 107,000 borrowers have had debt canceled through this process. Some high-profile examples include former students of ITT Technical Institute, Corinthian Colleges, and — most recently — DeVry University.

ED approved another $415 million in borrower defense claims in mid-February, the department said. Those claims included nearly 16,000 students from:

• DeVry University
• Westwood College
• ITT Nursing
• Minnesota School of Business/Globe University

The department is also moving to expand what constitutes fraud for borrower defense claims. These changes would no longer require students to prove they relied on misleading information from their school. They would also add "aggressive recruitment" as a category that can lead to a successful claim.

What's Holding Up Widespread Student Debt Cancellation?

The central debate on widespread student debt cancellation revolves around whether the Higher Education Act (HEA) allows any president to cancel debt through executive order.

First passed in 1965 and rewritten eight times since, HEA is the primary law through which ED manages federal student financial aid, collects data on U.S. colleges and universities, and administers many of the federal education policies created by Congress.

Experts fall on both sides of the argument. A Politifact breakdown found arguments both for and against the president's ability to enact mass cancellation. However, it seems most prominent economists and policy buffs do not believe debt cancellation would fall under executive power.

Democratic House Speaker Nancy Pelosi told reporters in July 2021 that the president does not have the authority to cancel debt. Meanwhile, Schumer has advocated for Biden's use of executive action to address the issue.

If Biden can't cancel student debt through executive action, a bill would have to pass through both the House and the Senate. There is little optimism such a bill would pass, as most Republicans oppose the idea, as do some moderate Democrats.