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Why Joe Biden hasn’t canceled student debt yet — and why he won’t go big if he does

President Biden has a tough decision to make on eliminating or reducing student loan debt.NICHOLAS KAMM/AFP via Getty Images

Under pressure from US Senator Elizabeth Warren and many on the progressive left, President Joe Biden is reportedly considering some form of student loan relief.

On the campaign trail, Biden vowed that he would sign legislation that would eliminate $10,000 worth of federal student loan debt, if it reached his desk. But with Biden’s entire domestic agenda stalled in Congress, the pressure is on for Biden to just wipe out this debt with the stroke of a pen.

The problem is: It’s unclear whether he has the legal ability to do that through an executive order.

His advisers are split on the question. So, too, are leading Democrats. For example, Senate Majority Leader Chuck Schumer believes it can be done — and has urged Biden to eliminate up to $50,000 in federal student loan debt per borrower. House Speaker Nancy Pelosi, however, says that Biden doesn’t have the authority.


Not only that, she appears to be opposed to it.

“Suppose … your child just decided they, at this time, [do] not want to go to college, but you’re paying taxes to forgive somebody else’s obligations,” Pelosi said last summer to reporters. “You may not be happy about that.”

This has been a buzzy few weeks for the topic. Biden attended a private meeting with congressional Hispanic leaders last week where he was urged to eliminate the debt - and he was reportedly receptive of the idea. At the same time, some Democrats are staring at bad polling numbers and urging Biden to do anything that could excite his base, especially with millennial voters’ support flagging.

Giving away free money to people who borrowed for their education might seem like a no-brainer. But here are four reasons why Biden has been slow-walking the initiative - and he won’t go big if he does do something.


1. Few will see the benefits

To be clear, there is a reason why student loans are on the national agenda. Soaring college tuition prices have led to education debt so huge that studies have found it has delayed millennials from buying homes and having children.

That said, it’s important to keep in mind a few statistics. First, only 13 percent of Americans have federal student loan debt. Second, 68 percent of Americans don’t have a college degree, and culturally they’ve been made to feel bad about it. This group could be among the first to create a backlash.

Accounting for the value of getting their education and adjusting for existing student relief programs, one Brookings Institution analysis found that almost a third of all student debt is owed by the wealthiest 20 percent of households and only 8 percent by the poorest 20 percent.

2. Increases inflation

Some analysts from the Federal Reserve have found that if Biden wipes out student debt to the order of the $50,000 mark, it would increase inflation by a half-point. That might not sound like a lot, but Biden is only a little more than six months from the midterm elections and will be looking to say to voters he did all he could to lower inflation and not increase the national debt. Republicans would surely remind voters if he did something that gooses inflation.

3. Republicans can run on the issue in several ways

Beyond the fiscal issues, Republicans this week are already signaling exactly how they will use any student loan forgiveness plan politically. They have called it a giveaway to “Ivy Leaguers” and lawyers, who theoretically amass larger student loans than others.


This may end up not being true, depending on the final form of the relief. Biden officials have said that they are considering some income limit as to who could qualify to get a break.

But that may not matter during campaign season when facts start to go out the window.

4. No proof those getting relief will reward Democrats

There is an underlying political premise from loan forgiveness advocates that they cannot prove to be true. The idea is that if student loan forgiveness happens, even if it is small-scale, Democrats will be rewarded in November for delivering to a certain pocket of voters.

Who knows if that’s true? After the Affordable Care Act passed, opening up health care access to millions of Americans, Democrats were clobbered in the 2010 elections and it polled badly in 2012 for Barack Obama’s reelection.

Yes, there is a recent poll showing that 60 percent of Americans favor some form of student loan forgiveness. However, more Americans than that backed a sweeping infrastructure bill. Democrats passed an infrastructure bill last fall, even garnering some Republican support along the way. Months later, Biden’s job approval ratings are still historically low.

More to the point: Voters didn’t reward Donald Trump at all when he issued the first round of COVID-19 pandemic stimulus checks — literally free money — weeks before Election Day. Nor did Biden get much credit from Americans when he continued the program. And when the stimulus check program just faded out, there was no national outcry.


On student loans specifically, Biden has acted to make sure that no one repaid a single federal student loan during his time as president — and he just extended the moratorium again until Aug. 31. Yet Biden has watched his support among younger Americans go down 21 points over the past year.

In other words, even if Biden did figure out a way to give himself the legal power to do it, reducing or eliminating student loan debt could be a move that wouldn’t help that many people, might have zero political upside, and could be another gift to Republicans this election year.

James Pindell can be reached at james.pindell@globe.com. Follow him on Twitter @jamespindell and on Instagram @jameswpindell.