Either way, Biden will have a choice: maintain Trump’s policies or get bigger and cancel the debt altogether, a move some Democrats argue Biden can go without Congress.
Biden dodged a question Monday whether he would use executive power to cancel student debts. Instead, he expressed support for the House Democrats’ stimulus package, which would extend the suspension of payments through September 2021 and remove some student debt.
“Democratic House legislation calls for an immediate $ 10,000 waiver on student loans,” said Biden.
“It stops people. You are in real trouble. You have to decide whether to pay your student loan or pay the rent, such decisions. It should be done immediately, ”he added.
An unprecedented step
The suspension and interest waiver only applied to federal loans, which covered approximately 85% of federal student loans. These included loans known as federal direct loans, as well as PLUS loans that parents may have taken out on behalf of their children.
It excluded some federal loans guaranteed by the government by not technically holding them. These were usually paid out before 2010.
Suspend payments vs. cancel student debt
The emergency measures came after years of debate among Democrats over how to reduce Americans’ gigantic student loan debt.
“While the minister has some power to cancel student debts, there is both a legal and a practical question of how far the government can go,” said Robert Shireman, who is the Obama administration’s deputy undersecretary for Education served and is currently a Senior Fellow of the Century Foundation.
Targeted loan waiver is easier
What is clearer is that the Department of Education can cancel student debts for borrowers who have been defrauded by their colleges.