President Joe Biden is exploring presidential authority to forgive student loans — but has yet to decide how best to address the financial burden on student borrowers. White House Chief of Staff Ron Klain said Thursday the president has asked his Secretary of Education Miguel Cardona to prepare a memo on the president's legal authority to cancel student debt.
Biden has previously suggested he does not have the authority to cancel $50,000 in student loan debt, saying he would "not make that happen" at a town hall in February, as some members of his party and progressives have called for. Instead he has indicated interest in canceling up to $10,000 and would prefer to work with Congress, but Klain's comments Thursday during an interview with Politico left the door open.
"He hasn't made a decision on that either way," said White House Chief of Staff Ron Klain in response to a question about the decision. Klain noted that Biden has not yet gotten the memo to make the decision.
"Hopefully, we'll see that in the next few weeks, and then he'll look at that legal authority." Klain said.
Student loan debt has topped more than $1.7 trillion, according to the Federal Reserve. More than 42 million Americans — roughly 1 in 8 — have student loans, according to the Department of Education. It's now the second largest amount of debt for households in the United States behind mortgages.
On Thursday, Democratic Senator Elizabeth Warren of Massachusetts — who along with Senate Majority Leader Chuck Schumer and others unveiled a resolution in February to cancel $50,000 in debt — continued to put pressure on Biden to end the "nightmare."
"Cancelling $50,000 of student loan debt is a matter of racial justice. It is a matter of economic justice. It is a matter of generational justice," she said at a news conference. She will hold a hearing focused on student loan debt later this month.
A report released last month by JP Morgan Chase Institute found canceling $50,000 in student loan debt with some income limits would reduce student loan debt by $786 billion. It also found canceling $50,000 in student debt delivers more total forgiveness to low-income borrowers, Black and Latinx borrowers and those facing a debt trap or long-term repayment over other smaller or more targeted options.
Unions ask for action on Public Service Loan Forgiveness
The Biden administration is also facing pressure from unions on the student loan debt front. On Thursday, a letter from 15 unions representing public service workers to Cardona urged him to take immediate action to cancel student loan debt for all public sector workers who have completed a decade or more of service.
The unions — which represent more than 10 million public service workers, including teachers and police officers — are specifically calling on Cardona to initiate a 90-day review of the Public Service Loan Forgiveness program and then cancel that debt.
The letter states since public service workers first became eligible for debt cancellation under the program in 2017, 98% of those who applied have been rejected. They blame a combination of factors including narrow regulations, mismanagement by the previous administration and "widespread abuses" by the student loan industry.
"This effort is the bare minimum necessary to deliver justice to the public service workers who have fallen through the cracks of our badly broken student loan system," the unions said.
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