A Stalling Agenda Could Lead to More Calls for President to Cancel Student Loan Debt

Setting aside partisan politics and whether President Biden’s Build Back Better Act will be law and what will happen in this November’s midterm elections, the uncertainty and lack of forward progress is causing many Democrats to raise the volume on calls to cancel student loan debt as a means of motivating their base.

Hearing Democratic lawmakers call on the president to cancel some or all of the outstanding student debt in the United States is reviving the debate on whether he can in the first place, according to a published report. It appears that the one thing everyone can agree on is that there is no clear answer whether the president has the authority to unilaterally cancel student loans. Those who argue he doesn’t have the authority say doing so will violate the Appropriations Clause of the Constitution and the 1982 Antideficiency Act, which prohibits the executive branch of the government from spending money without Congressional approval. Those in favor of cancellation say those provisions do not apply to student loan forgiveness and add that the Secretary of Education has “wide authority” when it comes to determining how student loan debts are collected and repaid.

Ultimately, if the president decides to move forward with some form of wide-scale cancellation, the issue would be whether lawsuits challenging such a move could succeed. Sen. Elizabeth Warren [D-Mass.] has penned a memo outlining that such lawsuits would “likely fail,” because the plaintiffs would be unable to prove how they were wronged — an issue of standing, as anyone in the accounts receivable management industry will recognize.

“Biden has expressed skepticism about blanket forgiveness allowing students who attended elite institutions to have relief and is likely fearing backlash from angry voters who have already paid off their own student loans or who did not choose to pursue higher education due to its cost,” wrote one analyst. “The looming midterm elections will keep deferment and forgiveness on the agenda as the Democratic Party debates the political consequences of each outcome.”

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