Justin Nelson’s letter, one of the thousands that arrived at the White House this month, said he was proud to vote for President Biden back in 2020. Now he had a request: Would the president please honor a campaign promise and use the enclosed pen to wipe out thousands of dollars he owes in student loans?
The letter-writing campaign — #PensForBiden — is the latest attempt to sway Mr. Biden on a high-stakes dilemma as the midterm elections approach and much of his domestic agenda remains stalled: What to do about the $1.6 trillion that more than 45 million people owe the government?
So far, Mr. Biden has extended the pandemic pause on student loan payments four times, most recently until Aug. 31. Payments have now been on hold for more than two years, over two presidential administrations.
But all that time poses problems. Many of the issues that have long bedeviled the loan system have only grown more complicated during the pause, and receiving bills again will infuriate and frustrate millions of people who feel trapped by a broken system and crushing debt.
Now some advocates believe Mr. Biden will have little choice but to do something that has divided his advisers: Wipe out thousands of dollars in debt per borrower with the stroke of a pen.
“If they want a smooth transition to repayment, I think the only way to do that is canceling debt,” said Natalia Abrams, the founder of the Student Debt Crisis Center, an activist group that supported the letter-writing campaign. “I think we’re at the point of no return on that.”
Perhaps the most concrete signal came this week: Representatives Tony Cárdenas and Nanette Diaz Barragán, two California Democrats, said Mr. Biden had discussed loan relief during a meeting with the Congressional Hispanic Caucus on Monday.
The lawmakers said Mr. Biden had indicated that he was looking to provide some form of debt relief and was exploring his legal options.
“He’s serious about it, and he’s looking to do something,” Mr. Cárdenas said. “He’s looking to do something that we would very much like, and he’s hoping to do it soon.”
Calls to cancel student debt have hung over Mr. Biden since before his presidency began, driven by borrowers and the progressive wing of his Democratic Party. He backed the idea on the campaign trail in 2020. “I’m going to make sure that everybody in this generation gets $10,000 knocked off of their student debt as we try to get out of this God-awful pandemic,” he told an audience in Miami.
Senate Democrats lack the votes to help make good on that promise, leaving executive action as the only possible pathway. But close allies say some influential members of Mr. Biden’s team have been reluctant for him to do it — some because they disagree with the idea of forgiveness and some because they don’t believe he has the authority.
“He’s got lawyers telling him he shouldn’t,” said Representative James E. Clyburn of South Carolina, the third-ranking House Democrat and a key supporter of Mr. Biden. But Mr. Clyburn, the most senior Black lawmaker in Congress, said presidential actions had brought sweeping changes before, including Abraham Lincoln’s Emancipation Proclamation and Harry Truman’s order banning segregation in the military.
“If executive orders can free slaves and integrate the armed services, it can eliminate debt,” Mr. Clyburn said.
Forgiving $10,000 per borrower would require the government to write off $321 billion in loans, according to an analysis released by the Federal Reserve Bank of New York last week. A separate study by the bank found that surveyed borrowers reported a 16 percent chance of quickly missing a payment if the moratorium ended.
Mr. Nelson, a 32-year-old bank operations associate in Minneapolis, said the pause had freed up $120 a month for home repairs and other expenses.
“It’s been a big change, and a relief,” he said.
A recent Morning Consult poll found that more than 60 percent of registered voters were in favor of some level of student debt cancellation. But despite Mr. Biden’s campaign promise, his advisers have been divided, three people with knowledge of the discussions said.
Some view debt cancellation as relief for critical constituencies, said the people, who spoke on the condition of anonymity because they were not authorized to speak publicly. Others oppose it as bad policy or because they fear the economic effects of putting more money in consumers’ pockets when inflation is soaring.
But the pressure on Mr. Biden to act has only grown.
Senator Elizabeth Warren of Massachusetts, whose pledge to cancel up to $50,000 per borrower was a centerpiece of her 2020 presidential primary bid, and Senator Chuck Schumer of New York, the majority leader, led more than 90 congressional Democrats in sending Mr. Biden a letter last month asking him to “provide meaningful student debt cancellation.”
Outside groups have seized on Congress’s inability to enact other administration priorities, like voting rights protections and Mr. Biden’s Build Back Better agenda, as reason for the president to take matters into his own hands.
The New Georgia Project, a group focusing on voter registration founded by the gubernatorial candidate Stacey Abrams, has cast debt relief as an action that would serve Mr. Biden’s pledge to put racial equity at the forefront of his presidency.
“Much of your administration’s legislative priorities have been stymied by obstructionist legislators,” the group wrote in a joint letter with the advocacy group the Debt Collective that was reviewed by The New York Times. “Student debt cancellation is a popular campaign promise that you, President Biden, have the executive power to deliver on your own.”
Astra Taylor, a founder of the Debt Collective, said she believed resistance inside the administration was wearing down as advocates have pushed back against the belief that forgiveness would be a giveaway to well-off college graduates — a rationale that Mr. Biden cited last year as a reason for not backing a $50,000 cancellation.
Such considerations are still on Mr. Biden’s mind. He brought up a similar question on Tuesday, asking members of the Hispanic Caucus whether debt relief should be applied to borrowers of both public and private institutions, according to Mr. Cárdenas. Mr. Cárdenas replied that relief should be granted regardless of the university attended.
Top White House officials keep dangling the possibility of debt forgiveness. In announcing the latest pause extension last month, Mr. Biden’s press secretary, Jen Psaki, said he “hasn’t ruled out” the idea.
But Mr. Biden’s power to act unilaterally remains an open legal question.
Last April, at Mr. Biden’s request, the Education Department’s acting general counsel wrote an analysis of the legality of canceling debt via executive action. The analysis has not been released; a version provided in response to public records requests was fully redacted.
Proponents of forgiveness say the education secretary has broad powers to modify or cancel debt, which both the Trump and Biden administrations have leaned on to carry out the payment freeze that started in March 2020.
Legal challenges would be likely, although who would have standing is unclear. A Virginia Law Review article this month argued that the answer might be no one: States, for example, have little say in the operation of a federal loan system.
Leading Republicans remain strongly opposed. Representative Virginia Foxx of North Carolina, the top Republican on the Education and Labor Committee, called the latest extension a taxpayer-funded giveaway to “graduate students and Ivy League lawyers” and said she feared it was “setting the stage for blanket loan forgiveness.”
The timing of the latest extension — ending two months before the midterms — makes some advocates think so, too.
“You wouldn’t do this if you’re going to kick your base in the teeth eight weeks before they go to the polls,” said Mike Pierce, executive director of the Student Borrower Protection Center. “You do this if you want the world to watch you deliver for the people who put you in the White House.”
Student Loans: Key Things to Know
Politics aren’t the only reason to forgive debt, borrower advocates believe. It would also be a chance to fix longstanding problems.
The Education Department is functionally the country’s largest consumer bank, holding more in loans than Americans owe on any consumer debt other than mortgages. But its outside loan servicers have for years drawn scathing criticism from government auditors and watchdogs, with even basic functions sometimes breaking down.
Some problems are being addressed. The Biden administration has wiped out $17 billion in debt for 725,000 borrowers by expanding and streamlining forgiveness programs for public servants and those who were defrauded by their schools, among others. Last week, it offered millions of borrowers added credit toward forgiveness because of previous payment-counting problems.
But there’s much still to do. The Education Department was deluged by applicants after it expanded eligibility for millions of public servants. And settlement talks in a class-action suit by nearly 200,000 borrowers who say they were defrauded by their schools recently broke down, setting up a trial this summer.
Even the logistics of collecting payments have grown more complicated. Two big loan servicers quit last year, forcing the Education Department to shift millions of borrowers to new vendors — a process that is likely to take the rest of the year.
The six remaining servicers got another curveball from the Biden administration this month: Seven million people who have defaulted on their loans — nearly one in five of all federal debtors — will be restored to good standing.
Canceling debt could make addressing all this easier, advocates say. Forgiving $10,000 per borrower would wipe out the debts of 10 million or more people, according to different analyses, which would free up resources to deal with structural flaws, proponents argue.
“We’ve known for years that the system is broken,” said Sarah Sattelmeyer, a higher-education project director at New America, a think tank. “Having an opportunity, during this timeout, to start fixing some of those major issues feels like a place where the Education Department should be focusing its attention.”
Voters like Ashleigh A. Mosley will be watching. Ms. Mosley, 21, a political science major at Albany State University in Georgia, said she had been swayed to vote for Mr. Biden because of his support for debt cancellation.
Ms. Mosley, who also attended Alabama A&M University, has already borrowed $52,000 and expects her balance to grow to $100,000 by the time she graduates. The debt already hangs over her head.
“I don’t think I’m going to even have enough money to start a family or buy a house because of the loans,” she said. “It’s just not designed for us to win.”