Biden Changes His Mind on Student Loan Forgiveness

Michael Lux Analysis, Student Loan Blog 0 Comments

Can you feel it?

For the first time, federal student loan forgiveness looks like a real possibility.

President Biden asked his Secretary of Education, Miguel Cardona, to prepare a memo on the President’s legal authority to cancel student loan debt. On this surface, the Biden asking for a memo is hardly a revelation. However, the contents of the Cardona memo could change the lives of millions of student loan borrowers.

Biden’s Gradually Evolving Position on Federal Student Loan Cancellation

During the 2020 Democratic Primaries, Elizabeth Warren and Bernie Sanders both got a ton of attention and support for their calls to forgive large amounts of student debt. Candidate Biden did not support these policy ideas, despite significant popularity within the Democratic party.

Eventually, Biden came around on student loan cancellation. Kind of. Instead of forgiving $50,000, he only wanted to cancel $10,000. Rather than doing it through an executive order, Biden thought the change should come from Congress. Just last month, during a town hall when a borrower asked about $50,000 of forgiveness, Biden was clear: “I will not make that happen.”

Now Biden is exploring the President’s authority to cancel up to $50,000 of student debt without passing legislation through Congress.

Has Biden changed his mind, or is this memo an attempt to appease the progressive wing of the party?

The Significance of a Memo Request

When was the last time we heard about the President of the United States asking for a memo?

The mere request of a memo on Presidential executive order authority has generated national headlines. Once again, student loan cancellation is back in the national discussion.

Naysayers are already complaining that the memo will say Biden can’t forgive the debt and this whole exercise is political theatre. However, if Biden wanted to get progressives to back off, he could have just asked for the memo in private. Secretary Cardona could have prepared the memo, and when Senate Democrats asked about loan forgiveness, Biden could point to a memo that says he lacks the authority to cancel loans.

Instead, we have borrowers across the country excited about the possibility of help they desperately need. We also have a President showing a willingness to adjust his position on the issue.

What Will the Cardona Memo Say?

This is the $10,000 question.


If Biden’s Secretary of Education comes back and says the President has the authority to cancel student loans, Biden almost certainly has to cancel at least $10,000. His public position has been that he supports $10k of forgiveness, but he thinks it has to come from Congress. If his team says Congress isn’t required, Biden either has to go back on his word, or he has to cancel $10,000 worth of debt. If he had zero intention of canceling any debt, he wouldn’t have requested the memo in the first place.

However, Secretary Cardona may conclude that the President needs approval from Congress to cancel loans. He might also conclude that the law isn’t clear, and this issue should be left up to the courts. Either of these outcomes likely means that Biden won’t seek loan cancellation.

This site has previously examined this exact legal question. My take at the time was that things are unclear, so Biden was unlikely to forgive the debt. Now Biden is asking for clarity.

It is also worth noting that a team of Harvard attorneys found that the President of the United States can cancel student debt via executive order.

What Happens Next?

President Biden’s chief of staff, Ron Klain, gave a timeline of “a few weeks” on the memo.

If the memo concludes that Biden can cancel the debt, expect the administration to try to get something done by the end of September when the current federal payment and interest freeze expires. Even if Biden does issue an executive order canceling $10,000 or even $50,000 in student loans, expect litigation challenging his authority. It will be many months before borrowers know definitively if loan forgiveness is going to happen.

If the memo says the President can’t cancel loans, it may mark the end of the loan forgiveness debate during the Biden Administration.

Regardless, in a few weeks, borrowers will learn whether or not federal student loan cancellation is a real possibility or highly unlikely.

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