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Wednesday, Aug 27, 2025

AOC insists Biden can use executive order to cancel student loan debt

AOC insists Biden can use executive order to cancel student loan debt

Rep. Alexandria Ocasio-Cortez, D-N.Y., said progressives need to pressure President-elect Joe Biden to bypass Congress and cancel billions of dollars in student loan debt when he assumes the White House early next year.

Asked on Instagram whether student loan forgiveness is a "pipe dream," Ocasio-Cortez maintained that the policy is not – but said progressives need to push Biden to move further left on the issue.

"It is not a pipe dream at all," the New York Democrat said. "And most importantly, is that it can be done by executive order, which means that Biden would not need Mitch McConnell or the Republican Senate to forgive people's student loans. The key is that we need to push him."

Outstanding student loan debt has doubled over the past decade, nearing a staggering $1.7 trillion. About one in six American adults owes money on federal student loan debt, which is the largest amount of non-mortgage debt in the U.S. It has been cited as a major hindrance in people’s “economic life” by Federal Reserve Chairman Jerome Powell.

Some Senate Democrats and progressives are pushing for more debt relief: Sens. Chuck Schumer of New York and Elizabeth Warren of Massachusetts have both called on Biden to unilaterally cancel up to $50,000 of outstanding federal student loans per borrower.

"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," Warren tweeted last week. "This is the single most effective executive action available for a massive economic stimulus."

Warren said Biden could use existing executive authority under the Higher Education Act to order the Department of Education to cancel student loan debt. Previous estimates show that proposal would provide total forgiveness to more than 75% of borrowers and partial forgiveness for more than 95%.

Such sweeping executive action would almost certainly face a legal challenge, and it's unclear whether it could survive. Critics have argued that using such power exceeds the president's authority granted by Congress. Canceling student loan debt would also add to the nation's already-ballooning national deficit, which totaled a record $3.1 trillion for the 2020 fiscal year.

Biden has endorsed erasing some student loan debt "immediately" upon entering the White House, reiterating his support last week for a provision of the HEROES Act, which the Democrat-controlled House passed earlier this year.

Under that legislation, economically distressed borrowers would immediately have $10,000 in student debt forgiven. The government would also cover monthly loan payments for people with private student loans until September 2021 and forgive $10,000 of their debt.

“Immediate $10,000 forgiveness of student loans, helping people up there in real trouble," Biden said last week. "They’re having to make choices between paying their student loan and paying the rent. Those kinds of decisions.”

A Biden official later told Fox News that the former vice president does not want to issue an executive order and instead wants Congress to legislate on the matter.

But new analysis from the Committee for a Responsible Federal Budget shows that canceling student loan debt is an ineffective stimulus measure: Eliminating $1.5 trillion in loans would translate to just $90 billion or less in cash available to spend in 2021, and $450 billion over the next five years.

"The majority of those most affected by the current economic crisis likely have little or no student debt," the analysis said, noting that more than 70% of unemployed workers do not have a bachelor's degree.

"It is unlikely that broad student debt cancellation would be well-targeted toward those experiencing income loss. Nor is it well targeted toward those with low incomes," the nonprofit agency said.

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