Senate Democrats cited a provision in the new stimulus bill to again call on Biden to cancel $50,000 in student loan debt through an executive order — despite the president previously stating that he would not do so.

"Student loan debt is crushing millions of Americans," Senators Elizabeth Warren (D-MA) told reporters on Monday. "President Biden has an opportunity to fix that with the stroke of a pen. This bill helps pave the way to cancel $50,000 in student loan debt."

The recently-passed American Rescue Plan contains a provision championed by Senators Warren and Bob Menendez (D-NJ) that makes student loan forgiveness tax-free until 2026.

"Without this amendment, if someone were to have some or all of their student debt forgiven, they'd get stuck with the tax bill," Senate Majority Leader Chuck Schumer said during the press call. "Now, the provision would apply to nearly a hundred thousand students who are already in repayment programs that offer some student loan forgiveness, but even more importantly, and more crucially, it would apply to future efforts to forgive student loans."

Citing student loan cancellation as one way to address the racial wealth gap, Schumer added that the "Biden administration can and should go further and cancel $50,000."

'Perfectly set up' for executive action

Roughly trillion in federally-backed student loan debt is held by roughly 43 million Americans. Payments and interest on federal loans have been paused since March 2020 amid the coronavirus pandemic.

According to a recent report, only 32 borrowers have ever received forgiveness via the government's income-driven repayment plans that promise discharge after two decades.

Leading Democrats have been calling for the cancelling student debt through executive order since September have have repeatedly called on President Biden to do so in recent months.

Warren noted that forgiveness through executive order, as opposed to legislation, is preferably because "it gets done quickly and it gets done without having to go through the usual budgeting process." (The stimulus bill passed through the budget reconciliation process, and no Republicans in either chamber supported the legislation.)

“Figuring out the technical pieces of how to do this is not very hard, it’s perfectly set up for an executive order," Warren said, adding that the president "can do this and I very much hope he will, soon.”

The basic argument for the president to being able to forgive student debt, as detailed by the Legal Services Center of Harvard Law School, is that the Education Secretary has the power “to cancel existing student loan debt under a distinct statutory authority — the authority to modify existing loans found in 20 U.S.C. § 1082(a)(4).”

Schumer added that it would be "much harder to do it legislatively, [as] we have not seen our Republican colleagues jump at this opportunity. Getting this done is the most important thing, and the President can do it with a flick of a pen. That's the quickest, easiest, and best way to do it. If he doesn't do it, we'll pursue other options."

—

Aarthi is a reporter for Yahoo Finance. She can be reached at [email protected]. Follow her on Twitter @aarthiswami.

Read more:

• ‘Abysmal track record’: Few student loan borrowers received forgiveness through government repayment plan

• Does America's preferred student loan repayment program work? 'That is the big question'

• U.S. student loan system will lead to 'inevitable cancellation,' expert argues

• Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.