$50K of student loan forgiveness would wipe out federal debt for 36M, new data shows
More than 36 million Americans would have their federal student loans completely erased if the Biden administration were to accede to progressive demands to cancel up to $50,000 per borrower, according to new data from the Education Department.
The federal data was released on Tuesday by Sen. Elizabeth Warren (D-Mass.), who requested the information from the agency earlier this month.
Impact: If the federal government were to cancel that amount, 36 million of the 45 million federal student loan borrowers — roughly 80 percent — would have their debt completely eliminated, according to the data. That includes 9.8 million of the 10.3 million federal student loan borrowers who were either in default or more than three months delinquent on their debt at the end of 2019.
Key context: Warren and other Democrats, including Senate Majority Leader Chuck Schumer, have been pressing President Joe Biden to use executive authority to cancel student loan debt. The Biden administration has said it’s reviewing the issue.
The data provides more granular insight into how sweeping student loan forgiveness would affect the federal government’s $1.5 trillion student loan portfolio than is available from the department’s existing public datasets.
Less expansive student loan cancellation of $10,000 per borrower — which Biden backed on the campaign trail — would completely wipe out the debts of 15 million borrowers. About 4.6 million of those borrowers were in default or delinquent at the end of 2019.
The data also showed that millions of borrowers have been carrying federal student loan debt for decades. More than 10.6 million borrowers have been in repayment for more than 10 years. Another 4.4 million borrowers have been in repayment for more than 20 years.
Legal review: The Education Department’s response did not address Warren’s question on whether the Biden administration had rescinded a legal opinion published by the department in the waning days of the Trump administration. That memo concludes that the agency lacks the power to unilaterally to forgive large swaths of outstanding federal student loans.
White House chief of staff Ron Klain earlier this month told POLITICO that Biden expected a memo from Education Secretary Miguel Cardona within a “few weeks” about the administration’s legal powers to cancel federal student loans.
The Justice Department is also involved in that review, according to the White House.
