Resolution calls on the President to use Executive Authority to cancel up to $50,000 in federal student loan debt per borrower
Move would help boost economy amid COVID-19 recession
Washington, D.C. — Today, Georgia U.S. Senator Jon Ossoff joined with his Senate and House colleagues to introduce a bicameral resolution calling on President Joe Biden to use his authority to broadly cancel up to $50,000 in federal student loan debt per borrower to alleviate the financial challenges many are facing in light of the COVID-19 pandemic.
Led by Senators Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) and Congresswoman Ayana Pressley (D-Mass), the resolution calls on the President to use executive authority to cancel student loan debt and ensure there is no tax liability for Federal student loan borrowers resulting from administrative debt cancellation.
“The burden of student debt is crushing young Georgians and damaging our economy. I applaud the President’s suspension of federal student loan debt payments and interest through September, and we are calling on him to go further and use his authority to cancel up to $50,000 of federal student debt per individual, delivering the permanent student loan debt relief millions of Georgians and our economy desperately need,” said Senator Ossoff.
Research shows that broad student debt cancellation would boost our struggling economy through a consumer-driven stimulus and help close racial wealth gaps.
Today, over 43 million people in the United States are buried under $1.6 trillion in federal student loan debt. Studies show that cancelling student debt would substantially increase Black and Latinx 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.
Over 325 civil rights, climate, health, labor, consumer rights, and student organizations have called on President Biden to cancel federal student debt using executive action, including American Federation of Teachers, National Education Association, The Education Trust, Hispanic Federation, NAACP, National Urban League, UnidosUS, League of United Latin American Citizens (LULAC), Minority Veterans of America, National Women’s Law Center,
SEIU, the American Psychological Association, and more.
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 Federal 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.
To read the resolution, click here.