State AGs Endorse Call for President Biden to Cancel $50,000 in Federal Student Loan Debt

Troutman Pepper

Troutman Pepper

Last week, attorneys general from 17 states wrote a letter to Democrat and Republican leaders in both houses of Congress, expressing support for Senate Resolution 46 and House Resolution 100, which call upon President Biden to use executive authority under the Higher Education Act to cancel up to $50,000 in federal student loan debt for all student loan borrowers.

The attorneys general begin the letter by highlighting their responsibility for enforcing consumer protection laws and remarking that they are “keenly aware” of the “substantial burden” that federal student loan debt places on the residents of their states.

The letter also notes that student loan borrowers were already struggling before the COVID-19 pandemic, many owing more than they originally borrowed, and that as many as one in five federal student loan borrowers are now in default. The letter further notes that “many struggling borrowers are victims of predatory for-profit colleges that lure students with false promises and leave them with worthless degrees, few job prospects, and insurmountable debt.”

The attorneys general argue that the existing repayment system for federal student loans provide “insufficient opportunity for struggling borrowers to manage their debts or recover from the current economic crisis,” and that “broad cancellation of federal student loan debt will provide immediate relief to millions who are struggling during this pandemic and recession, and give a much-needed boost to families and our economy.”

The letter comes on the heels of a comment recently made by President Biden at a town hall meeting during which he stated that he is in favor of cancelling $10,000 in federal student loan debt, rather than the $50,000 advocated by the Senate and House Resolutions.

The states participating in the letter are Massachusetts, New York, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maryland, Minnesota, Nevada, New Mexico, New Jersey, Oregon, Vermont, Virginia, Washington, and Wisconsin.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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