- Jen Psaki said there’s no update on Biden’s legality to cancel $50,000 in student debt per borrower.
- It’s been over six months since Biden asked the Education and Justice Depts. to review his legality.
- Psaki said Biden would sign a bill to cancel $10,000 in student debt – the amount he campaigned on.
- See more stories on Insider’s business page.
President Joe Biden campaigned on canceling $10,000 in student debt per borrower, but some Democrats, led by Massachusetts Sen. Elizabeth Warren, want him to cancel $50,000 per borrower via executive action – something the president was unsure he had the authority to do.
That’s why the Education and Justice Departments have been reviewing his legal ability to do so, but White House Press Secretary Jen Psaki told reporters on Monday there’s still no update on those reviews. It’s been over six months.
“I don’t have any other update,” Psaki said during the press briefing. “I would say that, obviously, lowering the cost of college or relieving student debt is a priority to this President and this Vice President.”
In February, Psaki said Biden would ask the Justice Department to review his authority to use executive action to cancel student debt, but it’s unclear when exactly the department began that review. However, White House Chief of Staff Ron Klain told Politico in April that Biden had also asked Education Secretary Miguel Cardona to create a memo on the president’s legal authority to forgive $50,000 in student loans per person.
He said Biden “hasn’t made a decision on that either way, and, in fact, he hasn’t yet gotten the memos that he needs to start to focus on that decision.”
But Psaki on Monday did not comment on a reason for what might be holding up those memos, and she said that if Congress passes a bill to cancel $10,000 in student debt per borrower, Biden would be “happy to sign that.”
However, $10,000 is a significantly lower amount than what Warren, and many borrowers, want, and Warren told reporters during a press call in February that going the legislative route would take too long.
“We have a lot on our plate, including moving to infrastructure and all kinds of other things,” Warren said. “I have legislation to do it, but to me, that’s just not a reason to hold off. The president can do this, and I very much hope that he will.”
Millions of Americans will have to resume paying off their collective $1.7 trillion student debt burden in February, once the payment pause lifts. After a third major student-loan company, Navient, announced it would be shutting down its services, Warren told Insider the best thing that can happen for borrowers before payments restart is broad student-debt cancellation.
“Ultimately, the student loan system is broken,” Warren said. “The only way to guarantee that borrowers do not face the same predatory behavior from Navient’s replacement is to cancel student debt, so that no borrower’s future is held hostage by corporations profiting off their financial distress.”