“We have come to the conclusion that President Biden can undo this debt, can forgive $50,000 of debt the first day he becomes president," Schumer said Monday, speaking to reporters outside of his Manhattan office. "You don’t need Congress. All you need is the flick of a pen."
The New York Democrat has previously said Biden should enact a plan that he laid out earlier this year alongside Sen. Elizabeth Warren, D-Mass., under which the president could use executive authority to immediately cancel up to $50,000 of student debt per borrower.
Biden has called for forgiving $10,000 in student loan debt as part of a broader coronavirus relief package. Under that proposal, economically distressed borrowers would immediately have $10,000 in student debt forgiven. The government would also cover monthly loan payments for people with private student loans until September 2021 and forgive $10,000 of their debt.
But in a joint op-ed published last week, the senators urged Biden to go further left on the issue, arguing that broad cancellation of student loan debt would free up about $200 to $300 per month for millions of Americans. They maintained that Biden could use existing executive authority under the Higher Education Act to order the Department of Education to “modify, compromise, waive or release” student loans.
Schumer previously estimated his proposal would provide total forgiveness to more than 75% of borrowers and partial forgiveness for more than 95%.
"This debt is a huge burden on the backs of our students, standing in the way of them and their economy, and it stays with them for a very long time," he said Monday.
Still, such sweeping executive action would almost certainly face a legal challenge, and it's unclear whether it could survive. Critics have argued that using such power exceeds the president's authority granted by Congress. Canceling student loan debt would also add to the nation's already-ballooning national deficit, which totaled a record $3.1 trillion for the 2020 fiscal year.
A recently published report from the Committee for a Responsible Budget also shows that forgiving all student loan debt would provide just a small bump to the economy, increasing cash flow by about $90 billion per year, even though it would cost close to $1.7 trillion.
"There are a number of benefits and costs associated with canceling student debt," the report said. "But as a stimulus measure, its 'bang for buck' is far lower than many alternatives under consideration or the COVID relief already enacted."
On top of that, a large share of debt cancellation would benefit individuals with higher incomes who likely did not lose their job during the pandemic-induced recession. More than 70% of laid-off workers do not have a bachelor's degree, including 43% who did not attend college at all.
Less than one-third of all student debt is held by households without a bachelor's degree – while nearly two-fifths of debt is held by households with graduate degrees. A recent survey conducted by the Pew Research Center shows that most of the economic suffering from the crisis is concentrated among less-educated individuals.
Outstanding student loan debt has doubled over the past decade, nearing a staggering $1.7 trillion. About one in six American adults owe money on federal student loan debt, which is the largest amount of non-mortgage debt in the U.S. It has been cited as a major hindrance in people’s “economic life” by Federal Reserve Chairman Jerome Powell.
Experts have said that Biden's ability to follow through on his agenda, including hiking taxes on wealthy Americans, could be severely limited if the GOP retains control of the Senate, a battle that hinges on two January runoff races in Georgia. Democrats would need to win both races to secure a 50-50 tie; in that scenario, Vice President-elect Kamala Harris could cast a tie-breaking vote to move the Democratic agenda forward.