The student loan cancellation is apparently still alive.
Here’s what you need to know.
US Secretary of Education Miguel Cardona confirmed yesterday that the possibility of a large-scale student loan forgiveness – the notion of student loan cancellation for most or all student loan borrowers – could be beautiful. and well present. After announcing major changes to the cancellation of civil service student loans this month, Cardona has spoken publicly about the Biden administration’s next steps regarding the cancellation of student loans. (Are you eligible for a $ 4.5 billion student loan forgiveness?).
Student loan waiver: cancel student loans
At an event at town hall on Wednesday, Cardona said that “conversations are ongoing” regarding the cancellation of the student loan. “We’re going to continue the conversations about loan forgiveness – a large loan forgiveness,” Cardona said, according to TBEN. “Our conversations are ongoing with the Justice Department and the White House on these issues. We also want to make sure that we not only provide broad support to borrowers, but also stop the bleeding. “
Cardona added, “But we also have a Build Back Better program that provides community college for everyone. If it passes, and I’m really hopeful, we can fix some of the issues that have happened in the past, so that we don’t have people in debt and we can stop the bleeding. ”
What this means for student loans and student loan cancellation
Cardona’s comments suggest several things. First, Cardona confirmed that the Justice and Education Departments are in talks with the White House regarding the next steps for any possible large-scale student loan forgiveness. Second, Cardona has hinted that the Biden administration is focusing on debt relief through other means. For example, in addition to the $ 4.5 billion in student loan cancellation through civil service loan cancellation, the Biden administration focused on targeted student loan cancellation and canceled 11 , $ 5 billion in student loans. This includes major student loan relief, such as $ 1.5 billion in student loan cancellation through the borrower’s defense against repayment rule and $ 5.8 billion in loan cancellation. student due to total and permanent disability. Third, it appears the Biden administration not only wants to tackle student loan debt, but also provides student loan relief that tackles the underlying cause of student loan debt. While a large-scale student loan cancellation would offer substantial student loan relief, any large-scale student loan forgiveness would be a one-time event. That means it wouldn’t solve the tuition hike or help student loan borrowers who borrow student loans tomorrow or the next day. This doesn’t mean that there shouldn’t be student loan cancellations, but single student loan forgiveness does not address the underlying higher education issues that will persist after a large-scale student loan forgiveness. .
Where is the note on student loan cancellation?
The Education Department is preparing a legal note on the president’s ability to unilaterally cancel a student loan without further authorization from Congress. Progressive lawmakers such as Representative Ilhan Omar (D-MN) and Representative Alexandria Ocasio-Cortez (D-NY) have urged Cardona and President Joe Biden to release the memo by October 22, 2021. That is almost six months since White House Chief of Staff Ron Klain said the president asked the Education Department to rule on the large-scale student loan cancellation and legal authority. These lawmakers, like Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY), believe the president has the power to cancel student loans through an executive order. ‘a simple stroke of a pencil. The Trump administration concluded that the president did not have the unilateral power to pass a large-scale student loan forgiveness without further authorization from Congress. House Speaker Nancy Pelosi (D-NY) agreed, noting that only Congress can pass a large-scale student loan forgiveness. While the Education Department might come to a different conclusion than the Trump administration, Biden will make the final decision regardless of the content or recommendations of the memo. (Here’s how to get approved for a student loan forgiveness).
Student loans: next steps
Biden backs up to $ 10,000 student loan cancellations, but despite rhetoric from progressive members of Congress, has repeatedly said he doesn’t think he has the power to cancel student loans at all. the world. If the Education Department comes to the same conclusion, Congress will be tasked with passing legislation to deal with student loans. This could take several forms of student loan relief. Biden said he was ready to sign any large-scale student loan cancellation legislation. However, to date, Congress has not passed any large-scale student loan cancellation laws. The Democrat-controlled US Senate did not hold a vote on the large-scale cancellation of student loans. Despite a Democratic-led majority, Congress does not sufficiently support large-scale student loan cancellation, even among Democrats. Therefore, as currently proposed – outright cancellation of student loans of up to $ 50,000 for federal student loan borrowers – any legislative effort to cancel student loans would fail in Congress. (These student loan borrowers would not even be eligible for their student loan cancellation.) That’s not to say Congress can’t come up with an alternative solution – like student loan relief through bankruptcy, which has garnered bipartisan support. However, a large-scale student loan cancellation in its current form would not pass a congressional vote in both houses.
Student loan relief ends January 31, 2022. Now is the time to assess all of your student loan repayment options. Here are some popular ways to save money with your student loans:
Student loans: related reading
Biden canceled $ 11.5 billion in student loans, but here’s what that means for student loan cancellation
Student loan cancellation will not be available to these borrowers
Major changes to student loan forgiveness could come this week
How to get a student loan forgiveness