President Biden, cancel student loan debt
The Biden administration is considering the cancellation of up to $50K of student loan debt through an executive order. Doing so would benefit NYU students.
April 12, 2021
In a sharp departure from his centrist posturing during the Democratic primary, President Biden embraced the power of his office by signing more executive orders in his first two weeks than former Presidents Trump and Obama did in their first two weeks. Biden’s Chief of Staff Ron Klain revealed that President Biden directed the Department of Justice to determine whether he has the presidential authority to forgive student loan debt. If constitutionally permissible, President Biden should take immediate action on this issue to provide relief to students at NYU and other institutions of higher education.
The average debt of an NYU graduate is $21,250, with the majority being in federal loans. This translates to a median monthly federal loan payment of $221. Interestingly, graduates of public universities carry an average debt of $25,500, suggesting that debt issue is characteristic of institutes of higher education, regardless of whether an institution is private or public. Approximately a third of undergraduate students had to take out student loans to pay for their education. This is especially cruel when for decades, college graduates have outearned high school degree holders to the tune of $14,000 per year. A college degree might help its bearer make a better living, but it should not be necessary to shoulder tens of thousands of dollars in debt to afford such an education. College students from all educational backgrounds struggle with unprecedented levels of debt and urgently need relief.
Forgiving up to $50,000 dollars of debt would have great economic benefits. Professors at Brandeis University argued that this potential executive order would create “consumer-driven economic stimulus” by increasing the disposable income of millions of Americans. By removing a costly monthly student loan payment, millions of Americans would have more money to spend on small businesses and basic essentials. The Brandeis professors stated that much of this money would go toward additional wealth generators, leading to greater home-buying rates and increased business creation. With one executive order, President Biden could improve the financial stability of an entire generation and provide additional stimulus to jumpstart the economy.
Furthermore, this is also a racial equity issue. The average Black borrower still owes more than 100% of their student loan balance after 12 years of graduating. The lack of generational wealth in the Black community is a result of systemic racism. The student debt crisis disproportionately affects Black students. We still live in a country where Black college graduates do not have access to the same level of economic opportunity as white people, so it is also harder for Black borrowers to pay their debts off. I am glad that President Biden said that Black Lives Matter, and that his stimulus plan provides much-needed relief to minority communities, but we need to forgive student loans to bring economic prosperity more attainable for Black graduates.
Legal scholars are convinced of the potential order’s constitutionality. Yale Law Ph.D. candidate Luke Herrine has stated his belief that the president could direct the Department of Education to stop the collection of federal student loans. Laws governing disaster relief payments have already established that the president has the ability to “reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster.” With a creative definition of “qualified disaster,” this executive order could be issued.
Reporting from WSN has shown that many students have dropped out of NYU because of mounting student debt. At NYU, just 12% of students have their full financial needs met, driving students into debt that can occasionally reach upwards of $100,000. The allure of a private college degree attracts students to institutions like NYU. They should be able to walk away after graduation with their diploma and the skills to lead a happy life — and such extreme debt runs counter to that. President Biden can halt the rapidly growing debt that NYU students are left to deal with.
If the DOJ rules that it is constitutional for President Biden to forgive $50,000 of student debt, he should do it. He will save a whole generation with the stroke of a pen.
Opinions expressed on the editorial pages are not necessarily those of WSN, and our publication of opinions is not an endorsement of them.
A version of this article appeared in the Monday, Apr. 12, 2021 e-print edition. Email Kevin Kurian at [email protected]