Senator Warren Has a Plan to Cancel Student-Loan Debt — Without Congressional Approval

AP Photo, Elise Amendola

For the first time in any presidential-election campaign, mass student-debt cancellation has emerged as a major policy proposal. It’s easy to understand why. Student debt has exploded over the last decade, and Americans now hold more than $1.6 trillion of it.

Critics of any mass debt-cancellation plan are widespread. It would be difficult unless Democrats controlled both chambers of Congress, some argue. It would be difficult even if they did, as the idea splits Democrats.

But on Tuesday, Sen. Elizabeth A. Warren, a Massachusetts Democrat running for president, released a plan to accomplish that goal. Hours ahead of the last presidential debate before primary voting starts, she said she could eliminate federal student debt “on Day 1” without congressional approval. “I have consulted with leading experts on student-debt cancellation who are confident that this plan is permissible under current law,” she said.

Here are four things you need to know about the plan:

1. As president, Warren would direct the secretary of education to use his or her existing authority under the Higher Education Act to modify or eliminate federal student loans consistent with Warren’s plan, which calls for canceling up to $50,000 in student-loan debt for people with annual household incomes under $100,000, and a smaller amount for people with incomes from $100,000 to $250,000. Warren’s plan would not go as far as that of Sen. Bernie Sanders of Vermont, a Warren rival in the presidential campaign, to eliminate all student-loan debt, “no questions asked.”

2. The plan also calls for directing the Education Department’s Office for Civil Rights to conduct a “wide-scale investigation” into the role colleges, state higher-education systems, and the student-loan industry play in furthering racial disparities in student borrowing and debt. Warren noted that the median white borrower 20 years after starting college owes $1,000 in student-loan debt, while the median black borrower at the same point in time still owes $18,500. The department, the plan states, “is sitting on evidence of massive racial disparities in one of the country’s largest financial-assistance programs and it is not investigating the root causes of those disparities.”

3. Other elements of Warren’s college-affordability plan, such as making public colleges free, a $100-billion expansion of Pell Grants for low- and middle-income students, and a $50-billion funding increase for historically black colleges and other minority-serving institutions, would still need congressional approval.

4. The debt-cancellation plan released on Tuesday has its origins in research by the Debt Collective, an activist group that has been calling for mass student-debt cancellation for years. A researcher in the group, Luke Herrine, published a paper last month outlining the legal authority behind the idea. “We’ve been pressuring Warren and Sanders to publicly commit to using this authority,” an activist in the group said in a text on Tuesday. “It looks like Warren is the first to do so.”

The Department of Education didn’t immediately make someone available to comment on the agency’s legal authority to cancel student-loan debt. But a spokeswoman, Liz Hill, appeared to express skepticism in an email to The Chronicle: “I suspect Senator Warren’s colleagues might be surprised to learn she believes the executive branch could spend $1.4 trillion without express congressional authorization.”

Vimal Patel covers student life, social mobility and other topics. Follow him on Twitter @vimalpatel232, or write to him at vimal.patel@chronicle.com.