Biden: Okay, maybe I can't wipe out student debt on my own

We recently looked at an effort by Democrats and liberals to convince President Joe Biden to forgive large amounts of student debt via executive order if it couldn’t be done through congressional action. At the time, one of the primary questions that came to mind for me was, wait… can he do that? Apparently, I wasn’t the only one asking that question. During last night’s town hall on CNN, Biden was asked if he supported a plan put forward by Chuck Schumer and Elizabeth Warren where Uncle Joe would whip out his pen and erase up to $50,000 of student loan debt, perhaps for everyone. Not only was Biden not willing to sign on to the amount being requested, but he also said he “didn’t think he could do that” by the pen and the phone. (Business Insider)

President Joe Biden on Tuesday evening effectively rejected a Democratic plan put forward by Sens. Elizabeth Warren and Chuck Schumer to wipe out up to $50,000 in student-loan debt per borrower. Instead, he said he backed a measure to provide up to $10,000 in forgiveness.

“I will not make that happen,” he said of the $50,000 relief measure. Instead, he told a CNN town-hall audience he believed loan forgiveness “depends on whether or not you go to a private university or a public university.” …

“I’m prepared to write off $10,000 in debt, but not 50,” he said. “I don’t think I have the authority to do it by the sign of a pen.”

Keep in mind that the last time this subject was broached, Jen Psaki said that the request was being considered and researched.

Unless this was another “mistake in the communication” on either Biden or Psaki’s part, they were actively looking into whether or not the President could simply sign an order and make the debt disappear. It sounds like Biden’s team either determined that they couldn’t legally do it or he was looking for a nicer way to shoot down Schumer and Warren’s plan without having to flatly say no to them.

There are plenty of reasons to suspect that the President can’t do it, however. Keep in mind that there are several different types of student loans, but they are all transactional in nature. Federal student loans are paid directly out of taxpayer dollars and, since they are “loans,” that money exists on the books in the federal budget and it’s anticipated that it will be paid back at some point. Wiping out the debt eliminates revenue to the government which is functionally the same as spending money. The executive branch can’t simply spend money without Congress appropriating it.

The picture becomes even more cloudy when we’re talking about student loans taken out through banks or credit unions but guaranteed by the federal government. That money is owed to the institutions from which it was borrowed. A presidential order canceling such debt would require Congress to pay back all of the outstanding debt. Once again, that’s a budgetary maneuver and it should not be possible for the White House to kick off that process without the House giving a thumbs up first.

The problem with the idea of Biden just ordering the cancelation of federal student loan debt is that in order to stop him, someone would need to challenge the action in court. For that, you’re going to need someone with standing to bring the challenge. Who would do that? Some person who had their debt canceled and was angry that they didn’t get the chance to send the money to Uncle Sam? We seem to be in another gray area here.

In any event, I always make an honest effort to give Joe Biden props when they are deserved, and I do appreciate at least part of his response and his thinking. He’s drawing a distinction between forgiving debt for Harvard graduates (arguably some of the most employable people on the planet) and people with community college degrees who may be falling behind. That’s an important distinction to remember if we’re going to wind up doing any sort of debt forgiveness. He also seems ready to put a cap on the total amount so the cost doesn’t skyrocket any more than it would otherwise. And finally, Joe Biden spoke the words “I don’t think I have the authority.” That’s a hopeful signal if nothing else.