AOC: ‘Not sure’ why Biden hasn’t forgiven student loan debt

New York Congresswoman Alexandria Ocasio-Cortez joins 'Influencers with Andy Serwer' to discuss how student loan debt is weighing on the U.S. economy.

Video Transcript

ALEXANDRIA OCASIO-CORTEZ: I cannot understate the danger and the risk economically, politically, and just where we are right now as a country of allowing the moratorium on student loan payments to lapse in May. If we just allow a-- a full, just continuation of student loan payments, we are talking about a catastrophic development for millions, the over-- almost 50 million student loan borrowers in this country. There were millions of student loan borrowers that were already defaulting going into the pandemic.

But more than that, we are at such a delicate point in the financial and just general economic recovery post-COVID that to then restart payments that are essentially the size of a mortgage payment, sometimes even larger, on a generation that was already so devastated not just by this but the recession, et cetera, I believe it could very-- it could throw out of balance already what is a very fragile recovery.

And not only that, but this forgiveness is on-- I mean, forgiveness is-- is the just thing to do. It's the right thing to do. Why the president hasn't done it yet, I'm not sure, but I-- I do think that this is an issue of increasing urgency. He has already indicated an openness to it. And he has actually already used his authority to forgive student loan debt in certain small, very narrow cases.

ANDY SERWER: Because there are people who suggest he doesn't have the authority. Is that a legitimate argument or just maybe a smokescreen?

ALEXANDRIA OCASIO-CORTEZ: I don't think it's a legitimate argument. We've seen-- in fact, we've seen him use-- the same legal authority that-- that the president has used to suspend student loan payments is the same authority that he would use to cancel them. And not only that, but he has used that authority. He has indicated a willingness to use the authority. And I think that it would be extraordinarily important and urgent for him to do so.

ANDY SERWER: And what about the argument that it's a moral hazard? In other words, you're letting people off the hook by forgiving the debt?

ALEXANDRIA OCASIO-CORTEZ: Well what I think is the true moral hazard here is the surging costs of education in the United States. What has actually created the moral hazard is this guarantee of saying, we will issue minors hundreds of thousands of dollars in student loan debt at almost any level with almost no limit. And we will allow colleges and universities to dramatically increase the costs of their tuition with the guarantee of that loan value on 17-year-olds.

So what is the actual true moral hazard here in the situation is the controls on the cost of education in the United States. And one very important control in this to that note is tuition-free public colleges and universities. Because then what that does is that it introduces competition into the market to which private universities have to actually meet a lower baseline. But people act as though it's just fancy public schools that are extremely expensive now. But public college tuition has also increased dramatically far beyond the pace of inflation.