Democrats are putting increasing pressure on President Joe Biden to cancel student loans.
Here’s what you need to know.
After Biden extended student loan forgiveness for the third time, some Democrats in Congress want the president to enact large-scale student loan abolition. While they applaud the student loan forgiveness extension for 90 days, what they really want is a student loan cancellation. Senate Majority Leader Chuck Schumer has tweeted several times, “Today is going to be a great day for President Biden to cancel student loan debt.” Is Student Loan Cancellation Next? Well, that depends on what happens next.
Why do Democrats think Biden has the power to cancel student loans
Progressive members of Congress, including Schumer, Senator Elizabeth Warren (D-Mass.), Rep. Alexandria Ocasio-Cortez (D-New York), Rep. Ayanna Pressley (D-Mass.) and others argue that Biden has the current power to legislate broad-based repeal. Student loan broadly defined under the Higher Education Act of 1965. Specifically, Section 432A of the Higher Education Act refers to the authority of the Department of Education “to modify, settle, waive or relinquish any right, title, claim, privilege or demand, however acquired, including any ownership rights or any right of redemption.” These lawmakers believe the law gives Biden an unlimited right to cancel an unlimited amount of student loans for an unlimited number of student loan borrowers. One major issue, which often gets lost in tweets and audio clips, is that not everyone will be eligible for student loan forgiveness. (Here’s who won’t get student loan forgiveness.) If their interpretation is correct, they believe they have a clear roadmap to eliminating student loans today without additional congressional authorization. (How Your Student Loans May Qualify For $1.7 Billion Student Loan Forgiveness from Navient Settlement.)
Student loan forgiveness: Biden and others disagree that he has the power
Biden agrees that up to $10,000 in student loans should be rescinded, but says Congress should pass legislation to provide student loan forgiveness to millions of student loan borrowers. (Here are 5 major student loan changes in 2022.) However, Congress has not passed any legislation regarding large-scale abolition of student loans. why? There may be several reasons. First, Democrats have a slim majority in Congress, especially in the US Senate, where both Democrats and Republicans control 50 seats. Second, student loan cancellation is not universally popular (even among Democrats) other than the progressive arm of the Democratic Party. Third, given the slim majority, senators such as Senator Joe Manchin (D-Va) or Senator Kirsten Senema (D-AZ), among other more politically moderate or conservative senators, could block the passage of No legislation broadly exempting student loan. Biden also said he does not believe he has the authority to cancel student loans on a large scale without additional authorization from Congress. House Speaker Nancy Pelosi (D-CA) agrees with Biden and said that only Congress, not the president, has the legal authority to enact large-scale student loan cancellation. However, Biden canceled $12.7 billion in student loans through Student Loan Forgiveness. (Student loan borrowers will get $15 billion from student loan cancellation.)
Student loan forgiveness: Congress has 3 options
If Democrats want to push for widespread student loan cancellation, they can pursue 3 main options:
- Continuing the status quo to put pressure on the president via social media.
- Seeking to pass student loan cancellation legislation could build consensus through the political aisle.
- Pass legislation on alternative student loan forgiveness, which could include student loan forgiveness or any other forgiveness, that has support from Democrats and Republicans.
Unless Congress changes course, there is unlikely to be widespread student loan cancellation. While the president can seek to cancel the student loan, there is no current indication that he will. The greatest risk is potential legal challenges regarding the president’s authority to act, which could delay or prevent the implementation of any large-scale forgiveness. Some say Democrats will lose the midterm elections without student loan forgiveness, while others say student loan forgiveness may be the reason Democrats lose the midterm elections.
Student loans: your next steps
With the continuing uncertainty about student loan forgiveness, you should not expect anything. Prepare as if it won’t come, and this is the safest approach so you won’t be surprised. Instead, focus on exploring all of the options available to you to pay off your student loan. Here are some examples of paying off student loans faster:
Student loans: related reading
Is canceling student debt next?
Student loan borrowers will get $15 billion from student loan cancellation
Student loans will change in 5 major ways in 2022
Biden Extended Student Loan Forgiveness, But Advocates Really Want Student Loan Canceled