The Chances Of Mass Student Loan Forgiveness May Have Just Increased

Borrowers hoping that President Biden will forgive student loans got a boost of hope this week.

Yesterday, White House Chief of Staff Ron Klain announced that Biden has asked his Secretary of Education, Miguel Cardona, to compile a legal memo outlining potential authorities that could be the basis for enacting widespread student loan forgiveness through executive action. Cardona was tasked with exploring the viability of student loan forgiveness of up to $50,000. This new evaluation of legal authority to cancel student debt would be in conjunction with a separate legal review Biden instructed attorneys at the Department of Justice to perform.

This is a potentially significant development. Student loan borrower activists, borrower advocacy groups, and progressives in Congress have been pushing Biden for months to use his executive authority to forgive student loans. House and Senate Democrats issued a joint resolution calling on Biden to cancel $50,000 in student loan debt. Hundreds of civil rights groups, consumer protection organizations, and labor unions have joined the campaign, as well as state attorney general offices and even municipalities.

But Biden has been resistant. While he has expressed support for student loan forgiveness, he has not been enthusiastic about using executive action to enact such sweeping changes to the student loan system. Many student loan legal experts have argued that Biden has authority to enact widespread student loan forgiveness using executive authority, but Department of Education attorneys under former Secretary DeVos reached the opposite conclusion. Meanwhile, Biden has expressed deep uncertainty about this use of unilateral executive action.

In addition, Biden has consistently advocated for a smaller, “targeted” amount of student loan forgiveness — specifically, $10,000. In December, Biden said he would be “unlikely” to cancel or forgive $50,000 in student loan debt. Proponents of $10,000 in student loan cancellation argue that a smaller level of forgiveness would target the relief towards lower-income individuals. Forgiving or cancelling $10,000 in student loans would eliminate all outstanding student debt for over 16 million people, roughly a third of all current student loan borrowers. And it would reduce the balances of another 9 million student loan borrowers by half.

But advocates have been arguing that Biden needs to go much further. The fact that Biden is seriously exploring the viability of enacting student loan forgiveness through executive action is a potentially good sign for student loan borrowers. It may reflect the reality that Biden’s preference that Congress pass student loan forgiveness legislation may be a long shot given narrow Democratic majorities in both chambers, an expected Republican filibuster in the Senate, and the current focus on passing Biden’s infrastructure legislation, which will likely take months. Notably, Klain suggested that Biden was exploring legal authorities that would allow him to forgive student loans using executive action; Klain did not frame the initiative as an effort to find a legal basis for opposing such efforts.

Furthermore, the fact that Biden has tasked the Education Department with specifically exploring the viability of student loan forgiveness of up to $50,000 may be an indication that the President is softening his opposition to a larger amount of student loan forgiveness.

But nothing is guaranteed at this juncture, and Klain…