What a difference a year makes.
House Speaker Nancy Pelosi (D-Calif.) said Wednesday that she has no problem with President Biden citing the COVID-19 pandemic to cancel hundreds of billions of dollars in federal student loan debt.
“President Biden’s bold action is a strong step in Democrats’ fight to expand access to higher education and empower every American to reach fulfillment,” Pelosi said in a statement Wednesday, adding the move will help “more working families” meet their everyday needs “as they continued to recover from the challenges of the pandemic.”
However, the speaker took a very different tone just 13 months ago.
“People think that the president of the United States has the power for debt forgiveness,” Pelosi told reporters in July 2021. “He does not. He can postpone. He can delay. But he does not have that power.”
“That has to be an act of Congress,” she continued. “And I don’t even like to call it forgiveness because that implies a transgression. It’s not to be forgiven, just freeing people from those obligations.”
However, the Biden administration this week insisted that the commander in chief does have that power.
On Tuesday, Lisa Brown, general counsel for the Department of Education, issued a memo to Education Secretary Miguel Cardona detailing that the department planned to rely on a 2003 law known as the HEROES Act, which gives it broad authority to waive or modify student loans to alleviate hardships brought on by national emergencies.
Brown posited that under this law, the department could use its authority to address “the financial harms caused by the COVID-19 pandemic.”
The department lawyer also revealed the Biden administration is rescinding a January 2021 memo written by Trump administration officials that claimed the Education Department was unable to forgive large amounts of debt, saying that conclusion was “incorrect.”
The Biden administration plan would forgive up to $20,000 in student loan debt for borrowers who have received federal Pell Grants and $10,000 for those who have not. In order to be eligible for the relief, individuals must make less than $125,000 per year or less than $250,000 if they are a part of a household.
If all borrowers choose to claim the relief, the White House says, it will benefit up to 43 million loan borrowers – 20 million of which will see their debt completely canceled.
Biden also announced an extension of the moratorium on student loan payments to Dec. 31. The pause, which has been in place since March 2020, was scheduled to end Aug. 31.
Several progressive lawmakers, including Sen. Elizabeth Warren (D-Mass.) had urged Biden to go even further and cancel up to $50,000 in debt per borrower. That outcome was always unlikely as the president had repeatedly shut down forgiving that much.
Warren still praised the move on Wednesday, saying,” President Biden’s action to cancel student debt is life-changing for millions of working people. This is transformative relief for the middle class.”
In response, some social media users dredged up a video from Warren’s 2020 presidential campaign, when she was cornered by a voter who asked the senator if he would get any of his money back after saving it to ensure his daughter would not graduate college owing student loans.
“Of course not,” Warren said at the time, angering the voter.
“So you’re gonna pay people who didn’t save their money, and those of us who did the right thing, we’re going to get screwed,” he said.
As Warren attempted to respond, the voter continued to press, noting that a friend of his spent his money on a car and vacations instead of covering education costs.
“We did the right thing, and we get screwed,” he said before walking away.
On Wednesday, several lawmakers reiterated that voter’s concerns.
“There’s no canceling or forgiveness. The debt is transferred to hardworking taxpayers, many of whom paid off their loans already or decided to pursue a different career and forgo college. This is just bad economic policy and I don’t support this forgiveness approach,” said Rep. French Hill (R-Ark.)
“Biden’s proposal to ‘cancel’ student debt is fiscally reckless and will only transfer the responsibility to hardworking American taxpayers,” Rep. Rob Wittman (R-Va.) tweeted. “This is an insult to those who didn’t have the opportunity to attend college and those who worked hard to pay off their own debts.”
“I joined the military, used the GI bill & started at junior college. My wife waited tables. We sweated, sacrificed & saved to pay for our college educations & borrow to start & grow our small business. What lesson is Biden sending wiping clean debts students willingly took on?” Rep. Barry Moore (R-Ala.) wrote.