Student loan forgiveness will not be included in President Biden’s annual budget for the White House, further diminishing hopes of blanket loan cancellation of $ 10,000, let alone $ 50,000. While the options remain – Congress, executive action – it seems more likely that lending will only expand through reforms of existing credit relief programs. Here’s what you need to know.
What’s wrong with student loan forgiveness?
Said he supports the cancellation of a $ 10,000 government-sponsored student loan debt that was supposed to be passed through Congress, Biden stated in a town hall in February, “I don’t think I have the authority.” Even so, a few weeks ago he directed the US Department of Education to review its legal authority to cancel student loan debt through executive order.
But as a university specialist Mark Kantrowitz Put it on CNBCThis could be a way for Biden to pass the money on to Congress, his preferred option for all of the time:
“Only when he receives this report, which I expect does not have legal authority, will the ball be in the Court of Congress.”
G / O Media can receive a commission
The only problem with going through Congress is that there is no indication that student forgiveness legislation has enough support to pass as there is no consensus on how much should be given away. even among Democrats. With the Senate bogged down between Republicans and Democrats, Congress looks like a path that Democrats are avoiding, at least for now.
What is President Biden planning for student loan forgiveness?
On Monday the education department announced an official rewriting processthat could change the rules for existing federal student loan programs, including:
After President Biden’s recent executive action which resulted in relief Disability dismissal qualifications, along with US $ 1 billion debt relief under Borrower’s Defense for Repayment ProgramIt is likely that the reforms will bring more of this, making it easier for existing borrowers to either pay off debts (through) reduced payment requirementswho supports Biden) or relieve loans. While this type of regulatory reform does not require Congress approval, the process will take a long time, maybe up to a year (the first hearing) starts in June).
So is blanket student loan forgiveness dead?
Not quite. If you’ve withheld student loan payments because you’re waiting to be forgiven, you may want to wait a little longer, at least until the student loan payment moratorium expires (we’ve already discussed your options in this Lifehacker post).
Education Minister Miguel Cardona recently recommended that the student loan payment hiatus would not be extended beyond September 2021, but neither did he rule it out. Of course, you can still pay off your student debt, but as long as you’re not paying interest, it can’t hurt to wait until October.
