Hours after House Speaker Nancy Pelosi claimed that President Joe Biden lacks the power to cancel student loan debt on his own, Rep. Ayanna Pressley issued a statement Thursday pointing to a specific legal statute to argue that the president has such authority—and should not hesitate to use it.
In fact, Pressley (D-Mass.) noted, Biden “has already used that authority to cancel the debt of students defrauded by for-profit colleges, and he has used it to cancel the interest on federal student loans for borrowers across the country.”
“President Biden has the authority to cancel student loan debt,” Pressley said. “Student debt cancellation is a racial and economic justice issue and President Biden should act.”
Since taking office in January, the Biden Education Department has canceled nearly $3 billion in student loan debt for defrauded students and borrowers with disabilities, according to a recent Forbes analysis.
In her statement, Pressley cited Section 432(a) of the Higher Education Act of 1965 as evidence that the president can order the cancellation of federal student loan debt without congressional approval.
Section 432(a) states that the education secretary has the authority to modify loan terms and “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however, acquired, including any equity or any right of redemption.”
Last September, a trio of legal experts with Harvard Law School’s Project on Predatory Lending highlighted the same statute—and others—to support their view that the Education Department can “cancel existing student loan debt.”
“We have consulted the statutory and regulatory framework governing federal student loan programs administered by the Department of Education, as well as the framework and controlling interpretations of the budgetary structure of these programs,” the experts wrote in a memo (pdf) to Sen. Elizabeth Warren (D-Mass.). “We conclude that such broad or categorical debt cancellation would be a lawful and permissible exercise of the secretary’s authority under existing law.”
Along with Warren and Senate Majority Leader Chuck Schumer (D-N.Y.), Pressley has been leading the congressional push for Biden to unilaterally cancel at least $50,000 in federal student loan debt per borrower—a step that would completely wipe out student debt for an estimated 36 million people. Biden has previously said he is only willing to cancel $10,000 per borrower through legislation.
In a press conference on Wednesday, those three lawmakers also urged the Biden administration to extend a moratorium on student loan payments, which is set to expire at the end of September.
“As policymakers, we have a duty to do everything in our power to fundamentally improve the lives of the people we represent,” Pressley said. “Even before this pandemic hit, this was a $1.7 trillion student debt crisis… That’s a lot of people crushed and burdened.”
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