Luján Joins Warren, Schumer, and Pressley in Urging President Biden to Use Executive Action to Cancel Up to $50,000 in Federal Student Loan Debt Immediately
Washington, D.C. – U.S. Senator Ben Ray Luján (D-N.M.) joined U.S. Senator Elizabeth Warren (D-Mass.), Senate Majority Leader Chuck Schumer (D-N.Y.) and Congresswoman Ayanna Pressley (D-Mass.) in reintroducing a bicameral resolution outlining a bold plan for President Biden to tackle the student loan debt crisis by using existing authority under the Higher Education Act to cancel up to $50,000 in federal student loan debt for borrowers. The resolution calls on the President to use executive authority to cancel federal student loan debt and ensure there is no tax liability for student borrowers resulting from administrative debt cancellation.
Today, over 43 million people in the United States are buried under $1.6 trillion in federal student loan debt, including 223,000 individuals and $7.5 billion in New Mexico. Canceling up to $50,000 in student loan debt would eliminate full debts for between 77 and 86 percent of borrowers, or for 35 to 39 million people. Studies show that cancelling student debt would substantially increase Black and Latino household wealth and help narrow the racial wealth gap, provide immediate relief to millions of Americans during the pandemic and recession, and provide massive consumer-driven stimulus to our economy.
“Pursuing higher education should not lead to a lifetime of debt that holds people back from important milestones like having a child, buying a home, or starting a business. Sadly, that’s the reality for too many Americans struggling with mounting student loan debt. The federal government must act to alleviate this financial stress, cancel student loan debt, and help Americans recover and rebuild from this pandemic,” said Senator Luján. “I’m proud to join Majority Leader Schumer, Senator Warren, and my colleagues to introduce a strong student loan debt cancellation resolution and help Americans to regain control over their financial futures.”
Congress has already granted the Secretary of Education the legal authority to broadly cancel student debt under section 432(a) of the Higher Education Act of 1965 (20 U.S.C. 1082(a)), which gives the Secretary the authority to modify, “… compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” The Department of Education has used this authority to implement modest relief for federal student loan borrowers during the COVID-19 pandemic.
- Recognizes the Secretary of Education’s broad administrative authority to cancel up to $50,000 in federal student debt, using the modification and compromise authority Congress has already granted the Secretary in law;
- Calls on President Biden to take executive action to administratively cancel up to $50,000 in federal student loan debt for student loan borrowers using existing legal authorities under section 432(a) of the Higher Education Act of 1965 and any authorities available under the law;
- Encourages President Biden to use the executive’s authority under the Internal Revenue Code of 1986 to prevent administrative debt cancellation from resulting in a tax liability for borrowers;
- Encourages President Biden, in taking such executive action, to ensure that administrative debt cancellation helps close racial wealth gaps and avoids the bulk of federal student debt cancellation benefits accruing to the wealthiest borrowers; and
- Encourages President Biden to continue to pause student loan payments and interest accumulation for federal student loan borrowers for the entire duration of the COVID-19 pandemic.