Canceling $50,000 in student debt 'makes a lot of sense,' Obama's Education secretary says — and 'the authority is there' for Biden to carry that out

• John King is the first former Education secretary to call for broad student-debt cancellation.
• King, who served under Obama, told Insider Biden has the authority to cancel $50,000 in student debt.

Former president Barack Obama's Education secretary recently became the first with that title to call for broad student-debt cancellation.

And he thinks President Joe Biden can shoot higher than the $10,000 in loan forgiveness per borrower that he pledged on the campaign trail.

"The proposal from Senator Warren and Senator Schumer makes a lot of sense," John King told Insider, referring to the plan he supports, which was set forth by two of the most vocal lawmakers on the matter. "If you were to go to $50,000 of debt cancellation, that would give complete relief to more than 36 million Americans. So that certainly would be a great step forward."

In an opinion piece for Insider last month, King detailed why Biden can, and should, cancel student debt. In a later interview with Insider, he elaborated, explaining that the pandemic presents a unique case for student-loan relief compared to when he served as Obama's Education secretary. Though payments have been paused for two years, borrowers need more, King said. May 1 is too soon to stick 43 million student debtors with another monthly bill, advocates and lawmakers argue.

King said that as the country is recovering from the pandemic, it's the perfect time to correct the lack of investment in higher education that created the $1.7 trillion student-debt crisis.

"We have a very different context today, with the COVID economic crisis and the opportunity to emerge from that crisis with really a New Deal moment where we tackle deeper systemic challenges," King said. "Higher education should be viewed as a public good, and we all benefit when students get access to and complete post-secondary education."

'This is really a moment to correct a policy mistake'

King, who is now running for governor of Maryland, said that the lack of free community college, along with limited aid for low-income students, is a policy failure that needs correcting. He noted the Pell Grant in particular, which is a grant for students that accounted for about 80% of the cost of college in the 1980s, but now covers less than a third due to soaring tuition.

"This is really a moment to correct a policy mistake of the last 40 years in terms of federal and state disinvestment, particularly from public higher education," King said.

Free community college was something King hoped to achieve under Obama, and he said it was disappointing it could not come to fruition due to a Republican majority in Congress. But it is something that is on Biden's agenda, along with raising the maximum Pell Grant award to increase college accessibility for low-income students.

"I'm going to get it done," Biden said during an October CNN town hall, referring to free community college. "And if I dont, I'll be sleeping alone for a long time," he said, likely referring to his wife, Dr. Jill Biden, who is a community-college educator.

Pegging tuition-free community college to broad student-loan relief is an idea a number of lawmakers have floated to prevent debt from rising after potential cancellation. Michigan Rep. Andy Levin previously told Insider that tying the policy measure to student-debt relief is "fixing the current problem and trying to prevent it from being such a problem in the future."

'The authority is there' for Biden to cancel student debt

During his tenure, King also worked with Obama to reform forgiveness for students defrauded by for-profit schools and to ensure monthly payments were affordable for borrowers through income-driven repayment plans.

Though Biden has also made strides in these two areas, as well as forgiving debt for borrowers with disabilities, he has yet to fulfill his campaign pledge to cancel debt broadly. The White House has said multiple times that if Congress sends Biden a bill to cancel student debt, he will be happy to sign it. But when it comes to acting on the issue using an executive order, Biden has expressed hesitancy with the idea and asked the Education Department to prepare a memo on his legal ability to wipe out student debt broadly.

Biden has yet to release the contents of the memo, so while borrowers do not know if broad relief is coming, King believes the memo should say the authority is allowed under the Higher Education Act.

"I do think the consensus of lawyers who looked at this question is that the authority is there," King said. "And the president during the campaign talked about his commitment to canceling debt. And so this is now the moment to follow through on that promise from the campaign."

Biden's campaign pledge to approve $10,000 in loan forgiveness for every federal borrower has yet to be fulfilled, and while some Democrats want to see him cancel up to $50,000 before payments resume on May 1, Republican lawmakers argue broad relief would hurt the economy and taxpayers. King said the government can afford that relief — and now is the time to deliver.

Do you have a story to share about student debt? Reach out to Ayelet Sheffey at asheffey@insider.com.