(NEXSTAR) – Financial impacts from the pandemic will be felt well into the 2021 calendar year, and Americans are wondering where to look for relief. Recent stimulus package proposals have repeatedly stalled, and skyrocketing case counts have states tightening regulations rather than opening up the economy. One area offering hope is financial aid relief under a Joe Biden presidential administration.
During the primary campaign, Biden came out in favor of ramping up education spending. He proposed free community college tuition and free public college for people below a certain income threshold. He also suggested a big wave of financial aid debt forgiveness at certain income brackets. But some of those sweeping spending initiatives may be difficult to broker now that Republicans appear to – at worst – hold half of the seats in the Senate.
Since the beginning of the pandemic, the estimated 45 million Americans owing government-backed education debt have seen their interest paused. That benefit is due to run out at the end of the calendar year. The most likely legislative route for debt relief remains tied to future stimulus packages.
Both Democrats and Republicans have offered some limited student debt forgiveness in proposals for new rounds of stimulus, with the left-wing of the Democratic party calling for outright cancellation of much of the estimated $1.5 trillion in debts held by the federal government. To date, none of those proposals has had the support to clear Congress, and it’s not clear that the election results will add much fuel to debt relief talks.
However, backers of student debt relief are increasingly pushing President-elect Biden to look at canceling balances through executive order rather than going through Congress.
“There are lots of big changes that a Biden-Harris administration can achieve on day one,” tweeted Massachusetts Senator Elizabeth Warren on Thursday. “Biden-Harris can cancel billions of dollars in student loan debt, giving tens of millions of Americans an immediate financial boost and helping to close the racial wealth gap. This is the single most effective executive action available for a massive economic stimulus.”
In September, Warren and Senate Minority Leader Chuck Schumer proposed a resolution calling on the next administration to use the powers granted in the 1965 Higher Education Act to cancel up to $50,000 in higher education debt.
According to the senators, such a move would help level the playing field for Black and Latinx borrowers and provide an immediate economic infusion cash infusion from those no longer burdened by the debt.
Similar debt cancellation proposals have been put forward by former Democratic presidential candidates Bernie Sanders, Andrew Yang and others.
While some view such action from the administration as the most straightforward path to debt relief, some analysts suggest the move would be sure to face legal challenges under the notion that only Congress controls the federal government’s tools for raising money.
For the most part, these proposals deal specifically with debt held by the federal government, not private agencies.
While Democrats are likely to keep the pressure on for debt relief stimulus, there has been no clear indication which path the Biden administration might take in trying to ease student debt. We may not get a clear picture of where that priority falls until after his administration is sworn in on January 20th.