Essay Margot Rathke Sarah Anderson

Biden Could Easily Cancel Student Debt, But Will He?

The federal government owns 92 percent of all student debt owed in this country. Canceling it could provide a huge stimulus.
[Quinn Dombrowski / CC BY-SA 2.0]

By Sarah Anderson and Margot Rathke / OtherWords

Washington is abuzz with ideas for actions the Biden-Harris administration could take that would not require congressional approval. One of the buzziest: canceling student debts owed to the federal government.

The Department of Education owns about 92 percent of the $1.6 trillion in student loans Americans owe. Many legal scholars say the department has the authority to wipe these burdens away with the stroke of a pen.

“This is the single most effective executive action available to provide massive consumer-driven stimulus,” Senator Elizabeth Warren wrote in a Washington Post op-ed.

Back in September, Warren joined with Senate Democratic Leader Chuck Schumer to call on the next president to cancel up to $50,000 in federal student debt for every borrower in the United States. That would eliminate loan obligations for more than three-quarters of the approximately 44 million Americans with student debts.

Meleiza Figueroa is one of those many millions. The first in her family to graduate from college in the United States, she worked hard and was lucky enough to receive scholarships. But as the cost of living soared and wages stagnated, she still had to take out tens of thousands of dollars in loans.

“As a working adult in this country, I’ve had to decide between daily food, medicine, shelter, and paying off this debt — and daily survival will win out every single time,” she said on a November 13 webinar organized by the Congressional Progressive Caucus Center.

Now the national coordinator of the Student Debt Campaign, Figueroa explained that debt cancellation would help her generation “fulfill our potential and contribute not just what little we can, but the best we can to society.”

Both Figueroa and Warren point out that student debt cancellation would help narrow the racial wealth gap.

On average, Black students have to take out larger loans to get through college than their white peers. A National Center for Education Statistics study reveals that Black bachelor’s degree graduates have 13 percent more student debt than white graduates. For graduates with associate’s degrees, the debt gap doubles to 26 percent.

Black graduates also face greater challenges in paying off their student debt because of their lower average incomes. Black bachelor’s degree and associate’s degree holders earn 27 percent and 14 percent lower incomes, respectively, than whites with the same degree.

Research by the Federal Reserve and the Levy Economics Institute shows that debt cancellation would also boost the national economy. Freed up from these financial burdens, former debt holders would have more buying power to stimulate the economy — just when we need it most.

Where does President-elect Joe Biden stand?

In March he tweeted support for a legislative proposal to cancel at least $10,000 in federal student loan debt per person. “Young people and other student debt holders bore the brunt of the last crisis,” he wrote. “It shouldn’t happen again.” But so far Biden has not committed to using executive action to avoid that historic repeat.

Rep. Ilhan Omar, who has championed proposals for universal student debt cancellation and free college, is among those pressing the Biden-Harris administration to take bold action.

The mountain of student debt, she said at the CPCC event, “is the result of a two-tiered education system — one for the rich whose families can afford to pay tens of thousands of dollars for higher education and the other for poor and middle class families who have to pay off that education for the rest of their lives.”

The Biden administration will have the power to address these inequalities, Omar said. “As Americans, we are not suffering from scarcity, we are suffering from greed.”

7 comments

  1. That’s definitive of today’s liberals: Cancel college debt, but no human rights (UN’s UDHR) to food ad shelter for those left jobless. Relieve worry for the middle class before considering the survival of the poor. Media such as MSNBC made right wing capitalism cool to the bourgeoisie. And that’s why there is no people’s movement.

    1. Yes, it should be made dependant on ability to pay; and, part of a larger reform extending tax funded public education another 4 years, with an additional provision for med school for those who qualify.

  2. Since it costs Biden nothing and would help so many, why not? Has Joe Biden in all his long political life EVER done anything to help real people, including students and the poor, let along Black student and poor?!!
    This does not mean others, especially poor, homeless , jobless do not need help too. The disgustingly filthy rich can be forced to pay taxes and this has actually been done in US history. Look at some of Richard Wolff’s videos shown every day!! Also, the USA makes its own money, and more than half of the “budget” goes for war, called “defense” but is does not defend the USA from misery for the masses.

  3. I think a percentage would be appropriate.
    One would need to see the data but perhaps as high as 75%
    tuition, like medical care, out paced inflation

  4. Another strange article. What does Biden have to do with anything? How are the Levy Institute or the Federal Reserve or Liz Warren for that matter helping anyone? Listening to people or groups like might confuse you about your interests but that’s always been the point.

    Freedom sometimes means not paying attention, just like in class. Stop paying your school loans, don’t wait for the gang to vote on your behalf. Choose Democracy always. As soon as they think they can get more evil and get away with it they lose.

  5. University education has rapidly devolved into an extreme functionalism piloted by corporate-minded administrations. Fewer advanced courses in language study, art history, literature, philosophy, anthropology.

    Meanwhile students are paying through the nose for a defective education–with or without Zoom. Aside from messing up their lives, In-debt ex-students are effectively kept from any sort of ethical dissent in the filthy political landscape.

    Well, pass legislation to decriminalize drugs so that unhappy ex-student debtors can get high and distracted.

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