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Schumer, Warren Call for Canceling $50,000 of Student Debt

September 18, 2020
 
 

Though acknowledging it likely won’t happen unless there’s a Biden administration, Senate Democratic leader Chuck Schumer and Senator Elizabeth Warren said they are proposing a resolution that would call on the next president to use authority they believe he would have to cancel $50,000 in federal student debt from all borrowers, a move that would completely eliminate the balances of 75 percent of all borrowers.

“There would be a giant sigh of relief from one side of America to the other,” Schumer said during a call with reporters, as many borrowers struggle financially during the pandemic-caused recession.

Schumer, however, said he does not believe President Donald Trump would take the action. Such an action would also in some ways go beyond the complete debt forgiveness for those making less than $125,000 that Democratic nominee Joe Biden is promising.

The Biden campaign didn’t return a request for comment, and apparently he hasn’t promised to make the move that Schumer and Warren are proposing. Schumer said of Biden, “We believe he will very seriously entertain the proposal.”

Rather, the move appeared to be aimed at furthering Democratic attacks, as the Senate remains stuck on creating another coronavirus relief package, that Trump is not doing enough to offer help during the coronavirus pandemic.

“Trump has given up the fight to contain the virus or give families the help they need,” Schumer said.

Warren, who said during her run for president that she’d act unilaterally to cancel debt, said the nation’s higher education law gives the Education Department authority to manage student loans, including canceling them. Warren cited an analysis from the Legal Services Center of Harvard University that the administration could cancel the debt.

Dan Madzelan, the American Council on Education’s associate vice president for government relations, said the Trump administration used that authority to waive interest on student loans earlier this year. However, he said the administration could not cancel private student loans. To do that, Congress would have to authorize money to pay the lenders.

Jason Delisle, a resident fellow at the conservative American Enterprise Institute, declined comment on the legality of unilaterally canceling debt. But he noted it would cancel the debt of people able to pay back their loans.

“For example, if the government forgives the debt of someone in good standing on a $30,000 loan who earns $100,000 a year, I can't really figure out why that isn't just arbitrary,” he said. “There's no hardship, no emergency, etc. Seems like a ‘just because I want to’ approach to policy. Maybe the statute really is that broad to allow total discretion to forgive debt whenever and wherever the secretary of education feels like it, but I'm skeptical.”

The Education Department and the Trump campaign did not immediately respond to requests for comment. A spokesman for Republican Senate Majority Leader Mitch McConnell declined comment when asked if the resolution would be allowed to come to a vote.

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