To start the new year Senate Majority Leader Chuck Schumer He said thinking It’s a ‘great day’ for the Biden administration to cancel student debt – something he said too About 20 times on Twitter In December alone.
Here who qualified for a student loan under tender
Over the past several weeks, Schumer has been ramping up pressure on President Joe Biden to waive up to $50,000 in federal student loan debt using executive action. Although Biden has advocated widespread student debt cancellation as a presidential candidate, he has not kept his campaign promise since taking office.
While Schumer and many outspoken progressives have called on Biden to rely on his executive authority to waive student loans, the White House recently said the president is waiting for Congress to implement the Student Pardon Act.
Keep reading to learn more about the potential spread of student loan forgiveness, as well as alternative loan repayment options such as refinancing. You can see the estimated student loan interest rates on Credible for free without affecting your credit score.
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Can Biden waive student loans by executive order?
According to the Higher Education Act of 1965, the Secretary of Education has the statutory authority to “impose, pay, settle, renounce or renounce any right” to collect federal loans, but it is unclear whether this includes debt forgiveness on a large scale.
Although Schumer and other prominent lawmakers such as Representative Alexandria Ocasio-Cortez and Senator Elizabeth Warren have urged Biden to cancel student loan debt, not all Democrats agreed that the president could do so.
Biden himself questioned his ability to cancel student loans — White House press secretary Jen Psaki recently told reporters that the president was waiting for a bill from Congress. She added that Biden’s presidential authority to cancel student loans was “under review.” House Speaker Nancy Pelosi also said earlier that the president does not have the authority to waive student loans, adding that it “must be an act of Congress.”
Passing student loan forgiveness legislation through a divided Congress would be a difficult task. Democrats have a slim 50-50 majority in the Senate, which means they will need the support of moderates like Senators Joe Manchin and Kirsten Senema in order to cancel student debt.
In addition, the federal student loan forgiveness will not apply to private student loans, which make up 8.4% of total student loan debt, according to the Education Data Initiative. Alternatively, private student borrowers can consider refinancing on Credible while rates are at their lowest.
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3 ways to manage your student loan debt
About 43.2 million Americans have student loan debt, with an average balance of $39,351And According to the Education Data Initiative. If you are struggling to manage your student loans, consider the following alternative options for paying off debt:
- Income-paid repayment plans. Enrolling in Income-Driven Repayment (IDR) will limit your federal student loan payments to 10-20% of your discretionary income, depending on the type of loans you have. You can get started on the Federal Student Aid (FSA) website.
- Additional Federal Tolerance. Federal student loans are currently subject to an administrative forbearance through May 2022, but borrowers may be eligible for up to an additional 36 months of student loan forgiveness through economic hardship or unemployment deferral.
- Student loan refinance. It may be possible to reduce your monthly student loan payments by refinancing to a lower rate through a private lender. Fixed student loan refinancing rates are currently at an all time low, which makes it a good time to secure better terms.
Biden’s Department of Education canceled $1.5 billion in student loans via borrower defense
Be aware that refinancing your federal student loan into a private loan will make you ineligible for government benefits, including current federal student loan repayment pauses, IDR plans, and select student loan forgiveness programs.
If you don’t plan to take advantage of these federal benefits—or if you’re one of the millions of borrowers who have private student loan debt—student loan refinancing can help you pay off debt faster, lower your monthly payments and save money on interest over time. Browse current student loan rates in the table below, and visit Credible to see offers tailored to you.
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