Rep. Ayanna Pressley made a compelling case for canceling student debt the same day House Speaker Nancy Pelosi faced harsh criticism for deeming President Joe Biden powerless to do so. Pelosi said during a news conference on Wednesday anyone who believes the president can forgive student loan debt on his own is misinformed. “People think that the president of the United States has the power for debt forgiveness,” Pelosi said. “He does not. He can postpone. He can delay, but he does not have that power. That has to be an act of Congress.
“I don’t even like to call it forgiveness because that implies a transgression. It’s not to be forgiven.”
She said the decision to help fewer people with larger amounts of debt versus helping more people who owe less is a policy discussion, but “the president can’t do it … So that’s not even a discussion,” Pelosi added. Video of the House speaker shared by journalist Michael Stratford had been viewed more than 366,000 times by Thursday morning. Some who commented on the footage thanked Pelosi for “setting the record straight.”
Alexis Goldstein, a financial reform policy analyst, however, said Pelosi is wrong. “This isn’t accurate,” she tweeted. “The Higher Education Act gives the Education Secretary the authority to modify, ‘compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity’. AKA: #CancelStudentDebt”
Goldstein included a link to a Q&A published on Sen. Elizabeth Warren’s Senate page. Warren and Senate Majority Leader Chuck Schumer wrote a resolution calling on Biden to take executive action mandating the secretary of Education to “administratively cancel up to $50,000 in federal student debt, using the modification and compromise authority legally granted by Congress.”
Legislators stated in the memo:
“The Harvard Law Project on Predatory Student Lending has consulted the statutory and regulatory framework governing federal student loan programs administered by the U.S. Department of Education, as well as the framework and controlling interpretations of the budgetary structure of these programs, and has concluded in this memo that broad or categorical debt cancellation or modification would be a lawful and permissible exercise of the Secretary of Education’s authority under existing law.”
Democrats also pointed to precedence set for administrative debt cancellation by former President Donald Trump and former Education Secretary Betsy DeVos. “In March 2020, prior to the passage of the Coronavirus Aid, Relief, and Economic Securities Act, the Education Department revealed to the press that Secretary DeVos had ‘exercised her [compromise]authority under Sec. 432(a)(6) of the [Higher Education Act] to allow a temporary waiver of interest based on the unique and special facts presented by the COVID-19 pandemic interruption and the resulting declaration of a National Emergency by the President,” the Democrats said in the Q&A. “According to reports, the Trump administration, when asked about the legal authorities explained, ‘That portion of the law gives the education secretary the authority to ‘enforce, pay, compromise, waive, or release’ debts.’
“In effect, Secretary DeVos canceled student debt (unpaid interest) in 2020 for the entire federal student loan portfolio pursuant to the same modification and compromise authority discussed above.”
Pressley didn’t speak to the legal pathway the president would need to take to cancel student debt, but she gave a personal account of why debt forgiveness is an issue of racial justice in video she shared on Twitter Wednesday. “As someone who grew up in a red-lined community like 85% of Black student borrowers, (I) felt I had no choice but to borrow in order to pursue higher education in light of the fact that Black families because of policy violence, were deprived the ability to build generational wealth,” Pressley said, “and Black student borrowers default at five times the rate of our white counterparts.
“That’s not abstract for me. That is personal. That has been my own experience.”
Pressley went on to say that the White House has repeatedly expressed a commitment to racial justice. “Well this is both an economic justice issue,” she said. “This is an easy lever to pull and to exact as a part of a recovery strategy to jumpstart the economy, to alleviate a burden for families, and also gets us one step closer to actualizing racial justice.”
The legislator used news of Historically Black Colleges and Universities canceling student debt with coronavirus relief funding as evidence of the burden student loan debt has disproportionately had on Black families. South Carolina State University cleared $9.8 million in debt for more than 2,500 students, and the university is one of more than 20 HBCUs using coronavirus relief to ease the pains of student debt, according to the UNCF and The Wall Street Journal. “And so we need to follow their lead,” Pressley said. “We should be being the pacesetters.”
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