AP Photo/Susan Walsh
- Nancy Pelosi recently said Biden does not have the authority to cancel $50,000 in student debt.
- 80 organizations responded to her comments in a letter explaining why Biden does have that authority.
- Pelosi's comments contrasted Schumer's views, who has been a leader in urging debt cancellation.
- See more stories on Insider's business page.
Last month, Speaker of the House Nancy Pelosi broke with many of her Democratic colleagues when she told reporters that President Joe Biden does not have the power to cancel student debt.
"People think that the president of the United States has the power for debt forgiveness. He does not," Pelosi said. "He can postpone, he can delay, but he does not have that power."
In saying so, Pelosi undercut the hopes of many progressives for massive student-debt cancellation, especially Sen. Elizabeth Warren and Senate Majority Leader Chuck Schumer, who have made that the core of their argument that Biden should cancel $50,000 per person. Progressive organizations are angry – 80 of them, at least.
The Student Debt Crisis, which advocates for student debt cancellation, led labor unions, civil rights groups, and more in writing a letter to Pelosi pushing back on her comments. They cited the Higher Education Act as the authority Biden has to cancel student debt, adding that the authority both President Donald Trump and Biden used to extend the pause on student-loan payments during the pandemic is the same authority that can be used for widescale debt cancellation.
"In addition, we were disappointed to hear you raise broader concerns about debt cancellation," the letter said to Pelosi. "Student debt cancellation doesn't simply aid the 44 million federal student loan borrowers who would benefit from this critical relief. It also benefits their families and neighborhoods. Indeed, all of America would benefit."
The letter cited a study from the Roosevelt Institute that analyzed Warren and Chuck's Schumer's $50,000 in student-debt cancellation proposal, in which it found the cancellation would be progressive, rather than regressive, meaning low-income borrowers would benefit more.
The racial impact of student-debt cancellation would also be significant, the letter said. Insider reported in April that 36 civil rights organizations released civil-rights principles detailing the benefits that student-debt cancellation would have on Black borrowers. The organizations, including the NAACP, wrote that Black borrowers typically owe 50% more student debt than white borrowers, and four years later, Black borrowers owe 100% more.
While Pelosi initially told reporters that student debt cancellation has to be "an act of Congress," a member of her staff later clarified her comments, saying that the speaker would support Biden "using any authority he believes he has to address the crisis of student debt in our country."
Still, Pelosi's comments came as a shock given that her counterpart in the Senate, Schumer, has been a leader on student-debt cancellation efforts. The Intercept reported last week that Pelosi's comments came after a memo circulated from Democratic megadonors Steven and Mary Swig - who gave maximum contributions to Pelosi - claiming that Biden cancelling debt is illegal.
But progressives are remaining consistent with their messaging that Biden can legally cancel $50,000 in student debt immediately by signing an executive order.
"The president has the power to cancel $50,000 in student loan debt right now," Warren told previously Insider. "Sen. Schumer and I are going to continue to push for this, but Biden doesn't need any authorization from Congress. He needs to pick up the pen and do it himself."