Advocacy groups demand Biden immediately cancel student debt

More than 175 advocacy groups representing borrowers want the Biden administration to move quickly to discharge student loans, as the president promised last August. 

Such a move would protect borrowers from harm and would be legal, the groups argued in a joint letter, citing an unsigned legal memorandum that outlined how the Higher Education Act of 1965 and other federal laws allow the administration to provide relief quickly. 

Restarting payments in October without debt cancellation would be a “grave mistake,” the joint letter states. The administration cannot extend the payment pause under the terms of the Fiscal Responsibility Act, which was passed this year to suspend the debt ceiling and avert a default. 

That act “has made it all the more urgent to act now to cancel student debt before payments resume,” the letter says.

The cited memo says the Education Department can issue orders to cancel the debts for a specific group of individuals, rather than a more forward-facing rule that would apply more generally, under the Higher Education Act. Orders won’t require going through the lengthy negotiated rule-making process.

“An action compromising up to $20,000 of debt for borrowers who had previously received specific, individual, and direct communication of qualification for cancellation would clearly constitute an order, rather than a rule,” the memo says.

Politico reported that the student debt relief advocates wrote the memo following a meeting with White House officials.

“Millions of people are counting on the Administration to act and fulfill its campaign promise to cancel student debt,” the letter says. “We urge you to act as quickly as possible to ensure that millions of borrowers can have a healthier financial future in the midst of the chaos of payments restarting.”