Elizabeth Warren Has A Plan To Cancel Student Loans Without Congress A little-known provision allows the U.S. education secretary to erase student loan debt without going to Congress. Elizabeth Warren says if elected president she would put that provision to use.
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Canceling Student Debt Is Easier Than It Sounds

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Canceling Student Debt Is Easier Than It Sounds

Canceling Student Debt Is Easier Than It Sounds

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DAVID GREENE, HOST:

So right now, more than 40 million borrowers owe the U.S. government $1 1/2 trillion in federal student loan debt. And two presidential candidates, Senators Elizabeth Warren and Bernie Sanders, say they want to erase most or all of that. Now, whether or not you think that's a good idea, NPR's Cory Turner says doing it might actually be easier than you'd think.

CORY TURNER, BYLINE: Up to now, the idea that Congress would ever agree to this kind of wholesale student debt forgiveness didn't just feel unrealistic. It made me think of this moment in "Star Wars."

(SOUNDBITE OF FILM, "STAR WARS: EPISODE V - THE EMPIRE STRIKES BACK")

ANTHONY DANIELS: (As C-3PO) Sir, the possibility of successfully navigating an asteroid field is approximately 3,720 to one.

HARRISON FORD: (As Han Solo) Never tell me the odds.

TURNER: Yeah, asteroid fields, student debt forgiveness, both the longest of long shots. But then Senator Warren made headlines last week when she said forgiveness is not such a long shot. Eileen Connor is legal director of the Project on Predatory Student Lending at Harvard.

EILEEN CONNOR: What Senator Warren's proposal is pointing out is that there's this free-standing power that the secretary of education has to cancel debts for any reason at all.

TURNER: Any reason at all. And Connor says if Warren becomes president, she wouldn't need approval from a divided Congress to do it. Luke Herrine is a lawyer and Yale Law School Ph.D. student who has studied this free-standing power.

LUKE HERRINE: So in the same way that a prosecutor of criminal claims has discretion to determine whether to offer a plea deal, whether to not pursue a case against somebody who may or may not have committed a crime, the secretary of education can determine not to enforce student debt.

TURNER: And Herrine says this power isn't even new.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER: On every continent and in every land, the story of Sputnik 1 dominated the front pages.

TURNER: In 1958, in response to the national freakout over the Soviet launch of the Sputnik satellite, Congress created the National Defense Education Act, and in it said that the then-equivalent of the ed secretary shall have the power to compromise, waive or release student debt. Today, using this authority may be surprisingly simple and would help tens of millions of borrowers, but it would almost certainly cause problems. It could trigger lawsuits and have tax implications if the erased debt is considered taxable income, though Warren has pledged that it won't. Forgiveness would also disproportionately benefit wealthier Americans and, obviously, cost hundreds of billions of dollars.

CONNOR: The legal analysis is not really designed to answer the question of whether that is a good thing to do or a wise thing to do but simply whether it's a legal thing to do.

TURNER: Eileen Connor, the attorney we heard from earlier.

CONNOR: And in my analysis, the law clearly allows for that kind of action to be taken.

TURNER: Connor says it's true this authority hasn't been used in this way before, but...

CONNOR: Just because something has never been done before isn't an argument for never doing it, and it's definitely not an argument that it can't be done.

TURNER: As for should it be done, that's a question voters will answer later this year. Cory Turner, NPR News, Washington.

(SOUNDBITE OF LACK OF AFRO'S "THE OUTSIDER")

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