October 2, 2023


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Student loan forgiveness could be more likely, but challenges remain

Senator Elizabeth Warren, a Democrat from Massachusetts, speaks as House Majority Whip James Clyburn, a Democrat from South Carolina, right, listens during a news conference on cancelling student loan debt in Washington, D.C., U.S., on Tuesday, July 23, 2019.

Andrew Harrer | Bloomberg | Getty Images

With Democrats in control of the White House and Congress, student debt forgiveness stands a better shot of becoming a reality for millions of Americans. 

Still, there are obstacles.

Will cancelling the debt be a priority for the young Biden administration, which comes in amid dueling and unprecedented health and economic crises?

“They have probably created a hierarchy of legislation they consider important,” said Richard Semiatin, an assistant professor at American University. “It’s unlikely this is on the first tier.”

On the campaign trail, President-elect Joe Biden promised to forgive $10,000 in student debt for all borrowers in response to the economic pain wrought by the pandemic, and the rest of the loans for those who attended public colleges or historically Black colleges and universities and earn less than $125,000 a year.

“We expect to hold him to that promise,” said Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, a nonprofit advocacy group.

One recent survey found that 58{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of registered voters are in support of cancelling student debt.

Administrative or legislative forgiveness?

Some Democratic senators are pressuring Biden to bypass Congress and cancel the debt on his own.

Sen. Elizabeth Warren, D-Mass., recently described student debt forgiveness as “the single most effective economic stimulus that is available through executive action.” Meanwhile, the Senate’s top Democrat, Chuck Schumer, D-N.Y., is calling on Biden to forgive $50,000 per borrower on the first day of his presidency. “All you need is the flick of a pen,” Schumer said in December. “You don’t need Congress.” 

Not everyone agrees. Experts say Biden would likely run into court challenges if he moved to cancel the debt on his own.

And now that Democrats have secured a majority in Congress, the legislative path may seem more hopeful. Yet there’s a long road from hopeful to borrowers seeing their debts reduced or eliminated.

Even with the two Senate seats Democrats picked up in Georgia, the party just eked out a majority, and will need Vice President-elect Kamala Harris to step in to rally 51 votes against Republicans’ 50.

Not all Democrats may be on board for student debt forgiveness and even if they were, procedural rules in the Senate generally require legislation to garner 60 votes. It will be hard to get nine Republicans in support of a debt jubilee.

“With Democratic control of government, the Republicans are likely to re-assert their interest in the federal deficit and government spending,” said Laurel Harbridge-Yong, associate professor at Northwestern University.

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Still, there may be a way around those rules. A once-a-year legislative process called budget reconciliation will allow Democrats to pass bills with their simple majority. That’s how Democrats pushed through the final version of the Affordable Care Act in 2010. It’s also how Republicans passed their massive tax cuts in 2017.

But there are limits to this method, said Ryan D. Doerfler, a law professor at the University of Chicago. “Democrats can only make use of reconciliation procedures three times over the next two years,” he said. Because this process can only be used once a year, there’s usually a lot of competition over what to include, and that will be particularly true during the pandemic.

Reconciliation legislation also must be related to budget changes, and senators can try to block any provisions they argue are not.

Given all the uncertainty of trying to pass legislation to forgive student debt, advocates and Democrats continue to call on Biden to cancel the loans administratively, saying borrowers can’t afford to wait for the relief.

“President Biden has a historic opportunity to improve the lives of tens of millions of American families struggling in the midst of a national crisis,” said Seth Frotman, who served as student loan ombudsman at the Consumer Financial Protection Bureau during the Obama administration.