Financial boon awaits AOC and other 'Squad' members if Biden cancels student debt

Andrew Kerr

July 16, 07:00 AM July 16, 07:00 AM

Rep. Alexandria Ocasio-Cortez (D-NY) and other members of the "Squad" of progressive Democratic lawmakers stand to receive a personal financial boon if President Joe Biden acquiesces to their demands to outright eliminate federal student debt.

Ocasio-Cortez, who makes a taxpayer-funded annual salary of $174,000, has repeatedly called on Biden to bypass Congress and cancel all existing student loan debt.

The New York lawmaker rarely acknowledges her personal stake in the matter — Ocasio-Cortez reported in her most recent financial disclosure owing between $15,001 and $50,000 in federal student debt, a liability that would be wiped clean if Biden caved to her demand.

"#CancelStudentDebt is 1 of the few, rare opportunities Biden has to go big w/o the Senate. He needs to take it," Ocasio-Cortez tweeted in June 2021.

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"Biden needs to lean on his executive authority now," the lawmaker tweeted in December. "He has been delaying and underutilizing it so far. There is an enormous amount he can do on climate, student debt, immigration, cannabis, health care, and more."

Biden said in April that he was considering using his executive authority to eliminate around $10,000 of outstanding federal student debt per borrower, a figure far lower than the $50,000 blanket student debt forgiveness Senate Majority Leader Chuck Schumer (D-NY) proposed in September 2021.

Interest and payments on federal student loans have been paused since the start of the COVID-19 pandemic in early 2020. Biden has extended the pause multiple times since becoming president, most recently in April when he extended the repayment freeze through the end of August.

Fellow Squad member Rep. Ilhan Omar (D-MN) owes between $15,001 and $50,000 in outstanding student loans. Omar has twice sent letters to the Biden administration demanding the president follow through on his promise to cancel student debt.

"Federal student debt can be canceled with the 'flick of your pen,'" Omar said in an October 2021 letter addressed to Biden. "This authority is already being put to use, as it is currently being used to cancel the interest owed on all federally-held student loans. Now it is time for you to honor your campaign pledge and use this authority to cancel all student debt."

Another member of the Squad, Rep. Rashida Tlaib (D-MI), disclosed holding between $50,001 and $100,000 in outstanding law school student debt in her most recent financial disclosure.

Student debt cancellation is a "racial justice issue," Tlaib said in a December 2021 blog post on her campaign website, in which she disclosed she was still paying back her student loan debt.

"Nearly all student loans are held by the federal government, and with one swipe of a pen, President Biden could free millions of our neighbors from the crushing burden of student loan debt," the Tlaib campaign blog post stated.

In total, 13 Democratic members of Congress who have publicly called on Biden to cancel student debt owe upward of a combined $1.5 million in outstanding student debt, the Daily Caller reported.

Kendra Arnold, the executive director of the conservative watchdog group Foundation for Accountability and Civic Trust, said it is fair to question whether the lawmakers are only advocating their interests.

“When Members have these type of connections to issues they are directly advocating for, it leads to citizens fairly questioning whether members are advocating for the public good or their own personal interests,” Arnold told the Daily Caller.

House Speaker Nancy Pelosi (D-CA) rebuked calls from the progressive wing of her party to cancel student loan debt in a July 2021 press conference, saying it wouldn't be fair to force the 62% of people over 25 who don't have a college degree to pay for those who do.

"Suppose … your child just decided they, at this time, [do] not want to go to college, but you’re paying taxes to forgive somebody else’s obligations,” Pelosi said. “You may not be happy about that.”

Total outstanding student debt clocks in at $1.6 trillion, but 53% of borrowers owe less than $20,000, according to the Washington Post. However, borrowers who owe the most tend to have the least difficulty repaying their debt due to the higher earning power that comes with the higher education level they obtained, Federal Reserve data show.

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Those who earn college degrees earn substantially more over the course of their lives than those who earned only a high school diploma.

Men who earn bachelor's degrees earn $900,000 more in median lifetime earnings than those who earned just a high school diploma, and women who earn bachelor's degrees earn $630,000 more in median lifetime earnings, according to the Social Security Administration.