Letter to the President - Rep. Ilhan Omar Leads Letter Calling on Biden Administration to Release Student Debt Cancellation Memo

Letter

Dear President Biden and Secretary Cardona:

We write to urge the release to the public by October 22, 2021 the memo that the President requested from the Department of Education to determine the extent of the administration's authority to broadly cancel student debt through administrative action.

On April 1, 2021, White House Chief of Staff Ron Klain said that this memo would be released in a matter of "weeks." With over six months having passed since that interview and only four months of pandemic forbearance left, borrowers are anxiously awaiting the administration's actions. The time has come to release the memo and cancel student debt.

Decades ago, Congress voted to authorize the executive branch to cancel federal student loans. Federal student debt can be canceled with the "flick of your pen,". This authority is already being put to use, as it is currently being used to cancel the interest owed on all federally-held student loans. Now it is time for you to honor your campaign pledge and use this authority to cancel all student debt.

Several legal scholars, including those at the Project on Predatory Student Lending at the Legal Services Center of Harvard Law School, and 80 members of the House and Senate confirm that the administration has the authority to broadly cancel student debt through section 432(a) of the Higher Education Act. Across the country city councils including Philadelphia, Boston, Washington D.C. Newark, Milwaukee, San Francisco, Los Angeles and others have passed resolutions calling on the President to use this authority to cancel student debt. It would be an exercise in legal gymnastics to suggest that the President had the authority to cancel the interest on student debt on his first day, but lacks the authority to cancel the principal on student debt moving forward.

The resumption of payments on federally-held student loans weighs heavily on tens of millions of borrowers. Forty-five million student debtors collectively owe $1.8 trillion of student debt, a sum almost equivalent to the $1.9 trillion the world's billionaires made in 2020 alone. While the rich have gotten richer, the economic harm of the pandemic has not subsided for ordinary Americans. Unemployment insurance has been cut off and millions are living under threat of eviction.

In the midst of an ongoing public health and economic emergency 16.5 million borrower accounts about to be transferred between student loan servicers -- a transfer necessitated by patterns of gross misconduct and abuse by entities such as Navient and PHEAA. Any attempt to restart payments or remain silent on matters regarding debt cancellation will result in unnecessary confusion and harm.

The time has come to release the memo and deliver on your promise to cancel student debt. Doing so will benefit every citizen and support our communities. With a single signature, you can improve the economy, create new jobs, transform the lives of 45 million Americans, narrow the racial wealth gap, and maintain the trust of voters.

We must also recognize that student debt significantly reinforces inequality. Two thirds of all student debt is held by women, with Black women the most burdened of all. Twenty years after starting college the average white student owes 6% of what they originally borrowed, around $1,000, while the average Black student still owes 95%, around $18,500. Cancelling all student debt would narrow the racial wealth gap among young Americans by more than half.

Even during times of economic normalcy, student debt is a policy failure. Turning student debt payments back on in the middle of a pandemic is an act of policy violence. Cancelling student debt is both the morally right and economically sound thing to do.

Sincerely,

Ilhan Omar

Member of Congress

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