Sen. Elizabeth Warren (D-Mass.) says she supports an additional stimulus package to help Americans suffering due to COVID-19 restrictions.
However, she says there is one action President-elect Joe Biden can take without Congress to help stimulate the economy: cancel billions of dollars of federal student loans.
During a Senate hearing on Tuesday, Warren asked Federal Reserve Chairman Jerome Powell how the economy could be affected by borrowers spending their part of their income to pay back federal student loan debt rather than paying for goods or services.
She also noted that the debt can make it harder for borrowers to get mortgages.
While she voiced support for additional fiscal stimulus, she said it is “pretty much impossible” to pass another stimulus bill “when Republicans in Congress refuse to take action.”
“But, student loan debt is different,” Warren said, adding, “All on his own, President-elect Biden will have the ability to administratively cancel billions of dollars in student loan debt using the authority that Congress has already given to the secretary of education.”
She argued that canceling federal student loan debt is the “single most effective economic stimulus that is available through executive action.”
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Sen. Elizabeth Warren: "All on his own, President-elect Biden will have the ability to administratively cancel billions of dollars in student loan debt." pic.twitter.com/pPdjwxDn8u— The Hill (@thehill) December 1, 2020
Biden appears receptive to calls to cancel student loan debt. But, his aides told Fox News that the former vice president believes loan forgiveness should be accomplished through legislation passed by Congress.
In remarks earlier this month, Biden said he would like to see “immediate $10,000 forgiveness of student loans, helping people up there in real trouble.”
“They’re having to make choices between paying their student loan and paying the rent. Those kinds of decisions,” he added.
While Warren argued that eliminating student debt would provide an economic boost, opponents argue a pause on debt payments would be a more effective stimulus.