Here’s where Democrats stand on student loan cancellation.
Here’s what you need to know.
Democrats control the White House, U.S. Senate and the U.S. House of Representatives, but wide-scale student loan forgiveness is nowhere to be found. This absence of student loan relief has left the nation’s 45 million student loan borrowers wondering whether they will ever get student loan cancellation. Will your student loans get cancelled? To learn the answer to this question, it’s important to understand where Democrats stand on student loans and student loan forgiveness.
President Joe Biden: Cancel $10,000 of student loans
Biden supports $10,000 of wide-scale student loan cancellation. Initially, Biden espoused student loan cancellation in response to the Covid-19 pandemic rather than to the general financial burden of student loans. Biden has been clear that only Congress can cancel student loans, meaning that Congress must pass legislation on student loan forgiveness, and he will sign any legislation on student loan cancellation that Congress passes. Biden, a former U.S. senator and former chair of the U.S. Senate Judiciary Committee, has said he doesn’t believe he has the legal authority to enact wide-scale student loan cancellation. (Here are 5 reasons why Biden hasn’t cancelled student loans). That said, Biden has aggressively cancelled student loans since becoming president. Biden has cancelled nearly $10 billion of student loans and will continue to enact student loan cancellation on a targeted basis. (Find out here if you qualify for nearly $10 billion of student loan forgiveness). While student loan cancellation can help student loan borrowers, this doesn’t mean that Biden will cancel everyone’s student loans. That said, Biden is committed to fixing student loans, including making improvements to income-driven repayment, public service loan forgiveness and student loan servicer accountability, among other efforts. Biden has also extended student loan relief twice for an extra year through January 31, 2022. (Here’s what Biden’s student loan relief means for your student loans).
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Senators Elizabeth Warren and Chuck Schumer: $50,000 of student loan cancellation
Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) have led the fight to enact wide-scale student loan cancellation. Special credit also to Sen. Bernie Sanders (I-VT), who advocated for wide-scale student loan forgiveness for all private and federal student loans. Warren and Schumer want Biden, not Congress, to cancel up to $50,000 of student loans for student loan borrowers. They say wide-scale student loan forgiveness will stimulate the economy and help student loan borrowers become free from the shackles of student loan debt. As a result, student loan borrowers will have more money to get married, start a family, buy a home, save for retirement, or start a business. While Sanders advocated for complete cancellation of all existing student loan debt, Warren and Schumer support student loan forgiveness only for federal student loans for student loan borrowers who earn up to $125,000 annually. They don’t support student loan forgiveness if you earn higher income than $125,000 annually nor do they support reimbursing you if there’s wide-scale student loan cancellation and you already paid off student loans. Warren and Schumer say Biden has existing legal authority under the Higher Education Act of 1965 to enact wide-scale student loan cancellation, and therefore they argue that no further authorization from Congress is necessary.
Speaker of the House Nancy Pelosi: Biden can’t enact student loan cancellation
Not all Democrats in Congress believe Biden can unilaterally enact wide-scale student loan cancellation. Speaker of the House Nancy Pelosi (D-CA), the most powerful Democrat in the House, says that only Congress can cancel student loans. As Pelosi has implied, Congress did not grant unlimited, unilateral authority for a president to cancel unlimited student loan debt for every student loan borrower. Pelosi, who like Warren and Schumer is a progressive member of Congress, has implied that separation of powers prevents Biden from enacting wide-scale student loan forgiveness. Pelosi noted that Biden has the power to “delay” or “postpone” student loans, but he doesn’t have the power of wide-scale student loan cancellation. Pelosi also said the American public may not be happy paying someone else’s student loan debt.
Moderates and conservatives don’t really support student loan cancellation
Here’s the reality that is rarely spoken about: Congress hasn’t passed any wide-scale student loan cancellation because it’s not that popular of a policy position. That may sound surprising, but there simply aren’t enough votes in Congress to pass any wide-scale student loan cancellation. That includes for $50,000, $10,000 or any other amount. Congress has passed stimulus packages and proposed budget and infrastructure packages — em data-ga-track="InternalLink:https://www.forbes.com/sites/zackfriedman/2021/08/25/congress-excludes-student-loan-cancellation-in-latest-budget-reconciliation/"">>but none contain wide-scale student loan forgiveness. The reason is not only Republicans’ opposition to student loan cancellation. Many moderate and conservative Democrats in Congress also don’t support student loan cancellation. Despite the public rhetoric, Congress hasn’t even voted on student loan cancellation yet, even though Democrats control both houses of Congress. Remember, supporters of student loan cancellation speak regularly in the media to lobby for student loan cancellation, while members of Congress who oppose wide-scale student loan cancellation rarely publicly voice their opposition. This can create an imbalance in public perception about the popularity of student loan forgiveness in Congress. That said, Democrats in Congress are supportive of reforming public service loan forgiveness and proposing alternative ways to help student loan borrowers with student loans.
With chances of wide-scale student loan forgiveness remain low, you may be asking whether you should stop paying your student loans. The good news is there are multiple alternatives to pay off student loans. Make sure you understand all your options and actively know your student loan game plan. Here are some popular options that can help you save money on your student loans:
- Student loan refinancing (get a lower interest rate + lower monthly payment)
- Income-driven repayment plans (get a lower monthly payment)
- Public service loan forgiveness (get student loan forgiveness)
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Source : https://www.forbes.com/sites/zackfriedman/2021/09/12/where-democrats-stand-on-student-loan-cancellation/1876