Senators Chuck Schumer and Elizabeth Warren have doubled down on their student loan cancellation strategy.
Here’s what you need to know – and why their strategy can be bad news for student loan cancellation.
Millions of student loan borrowers wonder if they will get their student loan forgiveness. Based on this current strategy in Congress, it is not clear if there will be a student loan cancellation. Why? Schumer, the Senate Majority Leader, and Warren are two champions of student loan cancellation. That said, their latest tweets to pressure President Joe Biden to cancel student loans by executive order won’t help their cause. Here’s what they each tweeted:
Chuck Schumer: “Today would be a great day for President Biden and Vice President Harris at #CancelStudentDebt.“
Elizabeth Warren: “Canceling student debt would immediately put money in the pockets of millions of Americans. It would help pull our economy out of this crisis. And we don’t have to wait for Congress: the Biden-Harris administration can do it with its executive authority. “
At first glance, these tweets look like simple calls to action. Warren and Schumer want President Joe Biden – not Congress apparently – cancel student loans by decree. However, this approach raises several concerns on the possibility of Congress – controlled by Democrats – passing the cancellation of the student loan. Let’s explore why.
Cancel student loans by decree
Warren says president can cancel student loans
According to Warren and Schumer, the Higher Education Act of 1965 (which is the current law) gives the United States Secretary of Education the legal authority to cancel student loans. In their view, the president already has the legal authority to cancel student loans. They refer to Section 432 (a) of the Higher Education Act, which grants the United States Secretary of Education the power to “modify, compromise, waive or release any right, title, claim, privilege or demand, however acquired, including any equity. or any right of redemption.
Biden wants Congress to cancel student loans
Biden wants to cancel student loans immediately. In this sense, Biden, Schumer and Warren agree in principle. As part of a comprehensive student loan plan, Biden wants Congress to write off $ 10,000 in student loans for student loan borrowers in response to the Covid-19 pandemic. However, Biden said he was unlikely to write off student loans by executive order. Instead, he wants Congress to pass stand-alone legislation or include the cancellation of student loans in the new stimulus bill. Why? Biden didn’t elaborate, but probably understands that Congress is the appropriate branch to write off student loans because Congress is in charge of federal spending. Student loans can be canceled by the US Secretary of Education (who is part of the executive) in the event of fraud, school closure, or total and permanent disability. However, Congress is unlikely to grant the president unilateral, uncontrolled power to cancel student loans of any amount for each student loan borrower without any Congressional approval. It is more reasonable to assume that Congress authorized the Secretary of Education to cancel student loans in limited circumstances as a matter of procedure.
Why student loan tweets can be bad news for student loan cancellation
These double tweets may not advance the cause of the student loan cancellation. Here are a few reasons why:
Biden is unlikely to use an executive order
Biden has made his position clear: Congress should cancel student loans and he is unlikely to use an executive order. Biden signed several decrees since he became president, including suspend student loan payments for 8 months. If Biden wanted to cancel student loans by executive order (or believed he had the power to do so), he would have canceled them. Congress is the branch that passes the laws (including large-scale student loan cancellation). There is nothing wrong with making your case, but is the strategy to put pressure on the president until he agrees with your position?
The optics don’t look great. Two Democratic senators, including the Senate majority leader, are pressuring the president (who is also a Democrat) to cancel student loans.
Timing of tweets
The Congress focuses on a major stimulus plan – which does not include cancellation of student loan – and an impeachment trial. If Schumer and Warren want student loan cancellation, how about including student loan cancellation in the stimulus package?
Why not focus on the legislation?
Democrats control Congress and the White House. There are several proposals in Congress, including from Schumer and Warren, for the cancellation of student loans. Why not just pass a law? This raises the question of whether Schumer believes he can make student loan cancellation legal.
Will your student loans be canceled?
Will your student loans be canceled? Tweeting to the president probably won’t cancel the student loan. If you can persuade the president that your legal interpretation is correct, do so. Otherwise, try to pass a law. Biden proposed to cancel student loans in three ways. This means that Congress has three different options to pass a student loan cancellation law. However, Biden is unlikely to cancel student loans through executive action. These double tweets do not move the ball forward. Rather, they raise questions about why Senate Democrats are not passing stand-alone legislation or including student loan cancellation in the stimulus bill. Fighting within parties is also leading to roadblocks, which could mean no student loan cancellations. Maybe they don’t have the voices. If this is true, then the student loan cancellation may not be won in advance. Therefore, do not rely on the automatic cancellation of your student loan. Instead, get a student loan game plan. Start with these three options, all free: