This month, for the first time in more than three years, federal student loan payments are coming due for 43 million Americans. President Biden campaigned on student debt cancellation and last summer he announced a policy that would cancel up to $20,000 of debt per borrower. This would have zeroed out loan balances for millions, but just over a year later, most of those borrowers face restarting their payments. Yet the president still has the power to cancel student debt — swiftly, completely and for everyone.
Although Biden’s proposed plan was groundbreaking — the first federal policy for mass student loan cancellation — the administration was slow to pull the trigger on its execution. For one thing, the policy required people to apply for relief, rather than universally administering it. This dramatically slowed the process, and by the time the Biden administration launched the application, conservative opponents were already making moves. Before a cent of the proposed cancellation could hit debtors’ accounts, half a dozen lawsuits had been filed to stop the program.
Weeks before the president announced his plan to slow-walk cancellation back to the plate, he pulled his star hitter — the payment pause — out of the game.
Most of the lawsuits didn’t hold water — who could reasonably have a claim that they were harmed by someone else’s debt cancellation? But one suit found a sympathetic judge at a district court, and then six more at the Supreme Court. In a 6-3 opinion, the conservative justices struck down Biden’s student debt relief policy.
Within hours of that ruling, Biden announced his intention to execute a Plan B — this time, invoking the Higher Education Act, the law which both creates student debts and the ability for the president to cancel them. (Biden’s previous attempt drew upon the HEROES Act, which authorizes the president to cancel federal student loans in national emergencies.) However, Biden’s Plan B uses “negotiated rulemaking,” a protracted process that will take months, if not a full year, to administer.
Even worse, weeks before the president announced his plan to slow-walk cancellation back to the plate, he pulled his star hitter — the payment pause — out of the game. In a last-minute attempt to negotiate the debt ceiling agreement, Biden agreed to Republicans’ demand to end the payment pause.
Recently, the Biden administration has adopted a strategy of canceling small pockets of debt. This week, for example, he ordered debt relief for 125,000 people, partially as a corrective for errors in the “income-driven repayment” system that have kept people in debt for decades. While Biden is showing his willingness to pursue cancellation, the effort needs considerably more gas; this most recent announcement affects less than one-half of 1% of student debtors.
Still, the announcement confirms an important truth: Canceling student debt is perfectly legal and urgently needed. These adjustments all depend upon the Higher Education Act, which lets the secretary of education modify, “compromise, waive or release” existing debt. But there is nothing in that law that delimits either the volume or velocity of cancellation. As Harvard Law School’s Legal Services Center told Sen. Elizabeth Warren regarding the Higher Education Act, “broad or categorical debt cancellation would be a lawful and permissible exercise of the Secretary’s authority under existing law … The power to create debt is generally understood to include the power to cancel it.”
These borrowers are demanding for the cancellation they need — and the cancellation they have been promised.
If Biden can cancel a corner of the debt, then he can cancel it all. Because the president has not gone this route though, student debtors are facing their first loan payments in three years. The Department of Education has attempted to soften the blow by revising repayment plan options, supposedly helping borrowers lower their monthly payments, but many borrowers are reporting that their payments have instead skyrocketed. Many student debtors are feeling left high and dry.
The fight for cancellation, however, is not over. And debt relief is still urgently needed. The Debt Collective, the nation’s first union of debtors (where I am an organizer) recently launched a first-of-its-kind online tool that invokes the Higher Education Act to automatically generate legal appeals for full cancellation for every borrower who fills it out. More than 25,000 borrowers have used the tool in its first month (much to the consternation of Education Department officials). These borrowers are demanding for the cancellation they need — and the cancellation they have been promised.
In spite of the return to repayments sans relief, one extraordinary thing has changed for student debtors: their belief that it could be otherwise, and their sense of outrage that it’s not yet different. For the last three years, 43 million Americans — not to mention the rest of the country — have watched the sky not fall as loan payments were paused. They have had their president legitimize their struggles to pay student loans. And they have been promised an alternative. Now, it’s time to fight for it.