In an extensive interview with The New Yorker published Monday, Rep. Alexandria Ocasio-Cortez said President Joe Biden, faced with right-wing Democrats and Republicans in Congress who have blocked legislation to materially improve working people’s lives, must swiftly use his executive power to cancel student loan debt as a politically and economically wise move.
The New York Democrat warned that the White House appears overly eager to leave the responsibility for making a difference in constituents’ lives with the U.S. Senate and House. Congress has so far been unable to pass Biden’s economic agenda, the Build Back Better Act, largely due to objections from Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) and the Republican Party.
“The president has a responsibility to look at the tools that he has,” Ocasio-Cortez said, pointing particularly to Biden’s ability to broadly cancel student loan debt, which is held by about 45 million Americans.
Eliminating student debt would save borrowers an average of nearly $500 per month, which takes an average of 20 years to pay, according to the Education Data Initiative—making it “one of the single most impactful things President Biden can do,” said Ocasio-Cortez.
“It’s entirely within his power,” she told New Yorker editor David Remnick.
This really isn’t a conversation about providing relief to a small, niche group of people. It’s very much a keystone action politically. I think it’s a keystone action economically as well.
Economists say eliminating student debt would swiftly boost home sales, as student borrowers are estimated to delay home ownership by five to seven years on average. It would also increase the U.S. real GDP by $86 billion to $108 billion, according to credit rating agency Moody’s.
Legal experts maintain that the Higher Education Act of 1965 gives Biden the authority to cancel student debt or adopt a proposal put forward by Sens. Elizabeth Warren (D-Mass.) and Chuck Schumer (D-N.Y.) along with Rep. Ayanna Pressley (D-Mass.) to cancel $50,000 per borrower.
Section 432(a) of the law states that Education Secretary Miguel Cardona has the authority to modify loan terms and “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.”
The White House asked the Education Department to examine whether it can broadly cancel student loan debt soon after Biden took office over a year ago, but officials have yet to release a memo detailing the administration’s authority.
“There are some things within the president’s control, and his hesitancy around them has contributed to a situation that isn’t as optimal,” Ocasio-Cortez said.
The presidency is so much larger than just the votes in the legislature… The president has not been using his executive power to the extent that some would say is necessary.
Biden’s hesitancy to do so, the congresswoman added,
has demoralized a very critical voting block that the president, the House, and the Senate need in order to have any chance at preserving any of our majority.
“She’s right,” tweeted the Debt Collective, a union of Americans who owe “unjust debts.”
She's right. pic.twitter.com/AvsmngmCH6
— The Debt Collective (@StrikeDebt) February 14, 2022
“We agree with AOC,” added the Student Debt Crisis Center.
There are 45 million Americans with student loan debt. Ignoring their calls to cancel student debt is bad politically and economically.
Ocasio-Cortez’s comments came as the Democrats are continuing to negotiate the Build Back Better Act, whose passage Manchin obstructed in December over its inclusion of an extended monthly Child Tax Credit. The senator also objected to key climate provisions and paid family and medical leave in earlier versions of the bill, forcing the party to significantly cut down the package before he ultimately rejected it.
The congresswoman warned that Biden can’t count on “getting something through that Joe Manchin and Kyrsten Sinema will approve of that will significantly and materially improve the lives of working people.”
Calling the legislative process a “shit show” which has so far allowed the party to miss “this very precious opportunity in the Senate for things to happen,” Ocasio-Cortez also warned that Democratic Party leaders take voters in solidly blue districts like hers for granted:
I come from a community that is often discounted in many different ways, because, you know, these are “reliable Democrats.” Like, what she has to say doesn’t matter, etc. What does she know about this political moment?
“The thing that’s unfortunate, and what a lot of people have yet to recognize, is that the motivations and the sense of investment and faith in our democracy and governance from people in communities like mine also determine majorities,” said Ocasio-Cortez.
They also determine the outcomes of statewide races and presidential races.