4 Signs That Student Loan Cancellation Isn’t Off The Table

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The debate over mass student loan forgiveness continues as advocates pressure President Biden to act.

Where Student Loan Forgiveness Is Currently Under Biden

Since Biden took office, a broad coalition of student loan activists, advocacy organizations, and prominent congressional Democrats has called for him to use executive action to cancel upwards of $50,000 in student loan debt for each borrower. are motivating. Many activists have framed the issue as a case of racial justice, in light of the fact that borrowers of color – and especially black borrowers – rely more on student loan debt relative to their white peers, and this More difficult to pay.

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While Biden has expressed support for some sort of comprehensive student loan forgiveness, he has called on Congress to pass student loan forgiveness legislation. That hasn’t happened, however, and there are no signs of Congress’s imminent action on student loans, as the House and Senate focus on voting rights legislation and Biden’s stalled economic agenda.

Prominent advocates and student loan legal experts have argued that Biden has the authority to cancel student loan debt largely under the express language of existing federal statutes, including the Higher Education Act, which Congress empowered the president (Secretary Secretary). through) education) to “compromise,” “release” or “forgive” federal student loans. But others, including Education Department officials in prior administrations, have come to the opposite conclusion—that the language in the Higher Education Act and related statutes is not broad enough, and that mass student loan forgiveness would be contrary to Congress’ intent.

While Biden campaigned for borrowers to forgive $10,000 in federal student loan debt and also championed other student loan forgiveness initiatives, he has expressed uncertainty that a substantial legal basis exists for Congress to act without it. He has also opposed large amounts of student loan forgiveness, which advocates and congressional Democrats have said.

Biden, so far, opted for a “targeted” approach to student loan forgiveness by expanding eligibility for relief under existing programs such as Public Service Loan Forgiveness, Total and Permanent Disability (TPD) Discharge Program, and Borrower Defense for Repayment Is. Billions of dollars in student loan forgiveness have already been provided to borrowers, but so far, this amounts to a fraction of 1 percent of outstanding student loan debt.

Still, there are signs that a comprehensive student loan forgiveness initiative has not been taken off the table.

Biden re-extends student loan payment pause

Last month, President Biden made a last-minute decision to extend the ongoing payment pause and interest freeze on most federal student loans. That relief was due to expire at the end of January, but Biden extended it by another 90 days to May 1.

While this relief is only temporary, it is notable in light of the fact that Biden administration officials repeatedly described the final extension of the pay break (until January 31) as “final”, and clarified that Borrowers should prepare for return repayment. Under pressure from activists and Democrats in Congress, the administration changed course, as Omicron cases exploded across the country and rising inflation began to undermine consumer confidence.

There’s no direct causal line between the latest extension of student loan payment breaks and mass student loan cancellations, but it shows the administration has been able to change course on student loan matters, using executive action to provide relief. , and is capable of relieving a comprehensive, well-coordinated pressure campaign. The extension of the payment due could also be a sign that Education Department and White House officials are still trying to figure out how to handle the unprecedented returns of repayment for millions of student loan borrowers who have to Nothing has to be paid on the loan. Nearly two years on, while the federal student loan program and the department’s debt service system undergo massive changes.

Debtors’ attorneys continue to push Biden. “Pauses on student loan payments have helped borrowers pay off other forms of debt, have given people economic independence, and have allowed many to pursue new job opportunities,” said Sen. Elizabeth Warren (D. -MA) – a leading advocate for borrowers – in a tweet on Wednesday. ,[The President] must be permanent #CancelStudentDebt,

Biden administration hasn’t issued student loan forgiveness memo

Nine months ago, President Biden asked the Department of Education and Justice to draft a memorandum to conduct a formal legal review and evaluate potential legal authorities for the president to cancel federal student loan debt using executive action. had ordered.

“The president continues to support the cancellation of student loans to provide relief to students and families. Our team is reviewing whether he can move through executive action,” said White House Press Secretary Jen Psaki said in a tweet in February last year, adding that Biden would welcome the student loan forgiveness bill passed by Congress.

While some White House officials said the memo would be released in a few weeks, that never happened. But it seems that the memorandum has already been prepared. Student loan borrower activists were able to obtain a heavily-edited copy of the memo last year. The amendments make it impossible to decipher clear legal conclusions or policy recommendations, but the non-revised components appear to prompt Education Department officials to seriously consider potential legal authorities to unilaterally cancel student loans.

There could be several reasons for the administration not releasing the findings of the memo. The memo may support the conclusion that the president does indeed have the legal authority to cancel student loans, but White House officials disagree. The memo may also support the opposite conclusion, and the administration doesn’t want to upset its premise by releasing details — but if Biden wants to end the student loan forgiveness debate, it has concluded by issuing a memo that he has no right. Not, of course, pursuing that goal. He hasn’t done so.

Others have speculated that the memo may actually support the argument that the president has the authority to cancel student loans in some capacity, and that the administration’s decision not to release details is a strategic delay – perhaps to the Department of Education. Under the current student loan forgiveness program to allow the first to try to maximize relief, to give officials more time to determine how to implement the recommendations, or to ask Congress to pass a student loan relief bill. be given more time.

Biden’s economic agenda stalled

Biden’s proposed economic agenda – which includes expanding the child tax credit, Universal Pre-K, new healthcare spending, and massive investments in green energy and climate change mitigation – stalled after Sen. Joe Manchin (D-WV) pulled the plug Has happened. conversation last month. While the White House is indicating it wants to continue talks, there are no signs that talks are progressing or progress is being made on any kind of new agreement. The White House and Democrats in Congress have now shifted their focus to voting rights and preserving democracy as their current priority.

If Biden cannot pass major economic initiatives through Congress, he may have no choice but to rely more heavily on executive action to drive sweeping changes. This could potentially increase the likelihood that it will use executive action to implement some sort of new, comprehensive student loan forgiveness initiative, above and beyond the targeted relief the administration has so far provided.

Biden hasn’t said “no” to mass student loan forgiveness

Notably, Biden has not explicitly come out against student loan forgiveness, even as the debate over his right to act continues. Last year, Biden said he does not believe he has the authority to cancel $50,000 of federal student loan debt for each borrower, and he opposes canceling that amount. Biden has also expressed concern (which has been repeatedly dismissed by experts) that mass student loan forgiveness would disproportionately benefit graduates of elite Ivy League schools (indeed, graduates of those schools all have outstanding student loans). hold only a small fraction of the debt).

But White House officials continue to express support for student loan forgiveness of some sort, and Biden himself hasn’t closed the door on a possible new initiative to cancel student loan debt. Unless he definitively says otherwise, the issue remains on the table.

further student loan reading

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Want Student Loan Forgiveness? Introducing a roadmap

3 big facts from Biden’s surprising detail of student loan relief

$2.4 billion in student loan forgiveness for 38,000 borrowers is in the pipeline, says Department of Education

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