Senate Democrats on Monday urged President Joe Biden to use his executive powers to cancel up to $50,000 in student debt following the passage of the $1.9 trillion Covid-19 relief package, which included a provision to make student loan forgiveness tax-free until 2025.
Senate Majority Leader Chuck Schumer, D-N.Y., joined Democratic Sens. Elizabeth Warren, of Massachusetts, and Bob Menendez, of New Jersey, to highlight the provision of the relief bill and said it clears the way for the Biden administration to use existing executive powers to cancel student debt for millions of borrowers.
Their collective pleas underscores that Democrats likely lack the votes to erase student debt by passing legislation, which would require at least 10 Republicans in the Senate.
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Schumer said some opponents of canceling student debt have tried to argued taxing loan forgiveness would make the relief moot.
"Even some in the Biden administration are making that argument but now that argument goes away," Schumer said.
The tax-fee provision will affect 100,000 students in repayment programs that offer forgiveness and will apply to future efforts to forgive student loans, Schumer said. Cancellation, he said, would offer millions of borrowers relief.
Democrats in both chambers of Congress have been renewing calls for Biden to make student loan debt forgiveness a top priority, arguing that it would help close the racial wealth gap and boost the economy.
The Biden administration has been hesitant to use executive action on the issue. White House press secretary Jen Psaki signaled recently that the administration would like to see a bill introduced in Congress on the issue.
Psaki told reporters last month that while "the president has and continues to support canceling $10,000 of federal student loan debt per person as a response to the Covid crisis," any further action would need to come from Congress.
She later tweeted that the White House would also be "reviewing whether there are any steps he can take through executive action."
On his first day in office, Biden also signed an executive order extending the payment pause on federal student loans due to Covid-19 until October. He then called on Congress in February to cancel $10,000 of federal student loan debt per person as an additional coronavirus relief measure.
Now, that the American Rescue Plan cancels the tax bill on student loan forgiveness, Schumer said it clears the way for Biden to issue an executive order on loan cancellation. He said going through Congress would be a protracted process.
“But if he doesn’t do it, we will pursue other options,” Schumer said.