The resolution is being pushed by Senate Majority Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), and Congresswoman Ayanna Pressley (D-MA) while supported by dozens of other Democratic lawmakers in the House and Senate.
“College should be a ladder up,” Schumer said during a press conference on Thursday morning. “For too many people, debt is the anchor that weighs them down and they rarely overcome it. This debt holds people back from buying cars, from going on vacations, from starting families, from getting the job they wanna get.”
After the Democrats’ press conference, White House Press Secretary Jen Psaki told reporters that the president supports the cancellation of $10,000 in student loan debt per person through Congress as opposed to executive action.
Biden has previously stressed that he preferred a legislative route for cancellation. "I’m going to get in trouble for saying this," Biden told a meeting of news columnists in December, raising the Democratic argument that "the president may have the executive power to forgive up to $50,000 in student debt. Well, I think that’s pretty questionable. I’m unsure of that. I’d be unlikely to do that.”
But more than an hour after her press conference, however, Psaki tweeted: “Our team is reviewing whether there are any steps [President Biden] can take through executive action and he would welcome the opportunity to sign a bill sent to him by Congress.”
Nearly $1.7 trillion in student loan debt is held by roughly 43 million Americans. Payments and interest on federal loans have been paused since March 2020, when the pandemic first started spreading in the U.S.
The student debt cancellation resolution was introduced by Schumer and Warren in September 2020. The resolution also calls for borrowers to not be left with a tax bill after cancellation.
“Cancelling student loan debt is the single most executive action that President Biden can take to kickstart this economy,” said Warren.“The idea behind this is to put more money into the pockets... for young people who are starting their economic lives.”
Pressley and Rep. Alma Adams (D-NC) stressed the impact of student loans on Black and brown Americans, with Adams also adding that she was a “college professor of 40 years, and I know how young people struggle to pay this debt.”
‘Congress gave the power’ to the government to cancel debt
At the confirmation hearing for Secretary of Education appointee Miguel Cardona on Wednesday, Warren stressed that there is sufficient backing in the law that allows for Biden to pull off such a move, even though Biden has previously said he’s not likely to do so.
The basic argument, as detailed by the Legal Services Center of Harvard Law School, is that the Education Secretary has the power “to cancel existing student loan debt under a distinct statutory authority — the authority to modify existing loans found in 20 U.S.C. § 1082(a)(4).”
Warren asked Cardona, who will be responsible for the office of Federal Student Aid, which oversees the trillion-dollar student loan portfolio, to “reform FSA so that it works for student borrowers instead of big corporations” and stressed that “Congress gave the power” to Cardona to cancel debt.
“If confirmed, that tool will be waiting on your desk when you are sworn in,” she added.
Consumer advocates applauded Schumer’s move to push for cancellation.
"Lawmakers are sending a clear message,” Natalia Abrams, executive director at Student Debt Crisis, an advocacy group, said in a statement. “ [As] a nation, we must do everything in our power to provide financial relief for individuals, to boost the struggling economy, and address our dark history of racial inequities during this unprecedented time. President Biden can do so with just the stroke of a pen."
— Jessica Smith contributed to this story.
Aarthi is a reporter for Yahoo Finance. She can be reached at email@example.com. Follow her on Twitter @aarthiswami.