Progressives who have spent months pushing President BidenJoe BidenManchin lays down demands for child tax credit: report Abrams targets Black churchgoers during campaign stops for McAuliffe in Virginia Pentagon, State Department square off on Afghanistan accountability MORE to cancel billions of dollars in student debt are now targeting the end of a federal pause on loan payments as a deadline for White House action.
Biden on Friday extended a freeze on student loan bills until Jan. 31 but said it would be the last time the Education Department renewed a pause on payments that’s been in place since the start of the coronavirus pandemic.
While the president won praise from some Democrats, he also raised the odds of a fierce intraparty debate spilling over into an election year by pushing the student loan repayment cliff into 2022.
Democratic lawmakers and activists who support executive action to wipe out much of the $1.6 trillion in federal student debt are pressuring Biden to act before roughly 43 million Americans must resume paying off their loans.
“Sounds like January 31, 2022 is the deadline to cancel student debt. No more extensions required,” said Rep. Jamaal Bowman (D-N.Y.) in a tweet.
Bowman is one of many progressive lawmakers in favor of Biden using the stroke of a pen to forgive $50,000 in student loans per borrower. The president has opened the door to eliminating some debt but has refused to go as high as $50,000 and suggested the amount forgiven would depend on the borrower’s income. He has also voiced support for capping loan forgiveness at $10,000.
Schumer, who faces reelection next year, has teamed up with some of the party’s more ardent advocates for canceling student debt, such as Sen. Elizabeth WarrenElizabeth WarrenMisguided recusal rules lock valuable leaders out of the Pentagon Biden's soft touch with Manchin, Sinema frustrates Democrats Hillicon Valley — Presented by LookingGlass — Congress makes technology policy moves MORE (D-Mass.) and Rep. Ayanna PressleyAyanna PressleyOvernight Health Care — Presented by The National Council for Mental Wellbeing — FDA panel advises Moderna booster shot for high-risk people Ilhan Omar to Biden: 'Deliver on your promise to cancel student debt' Biden's Red Queen justice: How he destroyed both the investigation and the reputation of border agents MORE (D-Mass.).
Within a week of the 2020 election, Schumer said Biden had the power and obligation to forgive up to $50,000 in student debt per borrower once he took office. Since then, Schumer and a coalition of progressive lawmakers have kept up pressure on Biden, most recently in a statement acknowledging the loan pause extension.
“While this temporary relief is welcome, it doesn’t go far enough. Our broken student loan system continues to exacerbate racial wealth gaps and hold back our entire economy,” Schumer, Warren and Pressley said in a Friday statement.
“Student debt cancellation is one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity.”
Progressives have supported executive action on student loan forgiveness for several years as a means of reducing inequality and closing the racial wealth gap. The issue has picked up broader support over the past 18 months as a pandemic economic relief measure, but it doesn’t poll well beyond the Democratic base and remains divisive among party leaders.
While Schumer has thrown his support behind unilateral forgiveness, Speaker Nancy PelosiNancy PelosiSen. Ron Johnson hoping for Democratic 'gridlock' on reconciliation package Virginia race looms as dark cloud over Biden's agenda Biden struggles to rein in Saudi Arabia amid human rights concerns MORE (D-Calif.) has expressed doubts about its legal and political viability.
“He can postpone, he can delay, but he does not have that power,” Pelosi said of Biden during a press conference last month. “That would best be an act of Congress.”
Though student loan forgiveness is widely popular among progressive voters, Pelosi suggested it could alienate others as Democrats attempt to defend several vulnerable members in highly competitive districts that could determine which party controls the House.
“Suppose your ... child just decided they at this time did not want to go to college, but you're paying taxes to forgive somebody else's obligations. You may not be happy about that,” Pelosi said.
Uneven Democratic support for student loan forgiveness and universal Republican opposition means a legislative debt wipeout is highly unlikely. Congress will also spend the next few months consumed by other legislation like the $1 trillion bipartisan infrastructure bill, the $3.5 trillion Democratic budget reconciliation measure, the debt ceiling and government funding.
Even so, pressure on Biden will only build as the U.S. gets closer to the eventual expiration of the student loan payment freeze, particularly as progressives keep up their efforts to push Biden toward the left.
Experts who support student loan forgiveness warn that Biden has a narrow window to nail down executive action before the end of the payment freeze given the plethora of legal challenges it will likely spawn.
Pamela Foohey, a professor at the Cardozo School of Law who specializes in consumer debt issues, said Biden likely has the power to forgive federal student loans under the Higher Education Act. But she added that the Education Department may determine it needs to submit a loan forgiveness program through the federal rulemaking process, which could take “upwards of a year.”
“If the moratorium ends at the end of January and people have to pay on those loans for another couple years that could be really economically devastating for a lot of families,” Foohey said.
Democrats are also hoping to avoid a repeat of the recent eviction moratorium extension in which Congress failed to act, despite knowing about the deadline a month out, and Biden took executive action that has since drawn legal scrutiny.
Any student loan forgiveness plan would likely be tailored closer to what Biden has laid out, not necessarily the $50,000 progressive goal.
“The Education Department probably will forgive a portion of loans for a portion of people with good economic backing to do so. It will save the country more money to release people from this burdensome debt than it would to try to collect it from them,” Foohey said.
While the course of action Biden lands on may be less ambitious than progressives hope, it could still have a meaningful impact on some of the hardest hit borrowers, according to a Federal Reserve survey from May.
The Fed found that 20 percent of Americans with student loan debt were behind on their payments last year, including 31 percent of those with an associate’s degree or less. But the Fed also found that those with higher debt burdens were slightly more likely to be able to stay current with their loans thanks to higher educational attainment.
While 21 percent of borrowers with less than $15,000 of outstanding debt were behind on their payments, just 17 percent of those with $15,000 of debt or more were behind as well.