President Joe Biden is still considering wide-scale student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
Never say never when it comes to student loan forgiveness. After extending the student loan payment pause for an unprecedented fourth time, Biden provided student loan borrowers with another financial lifeline. The next question is: Will your student loan get canceled?
White House: Biden is considering student loan forgiveness
Biden is still considering student loan forgiveness. Here was the most recent exchange between a reporter and White House Press Secretary Jen Psaki at Wednesday’s White House press briefing:
Reporter: “And has the President, at this point, ruled out a possible executive-level cancellation on a wide-scale of student debt?”
Psaki: “He has not ruled out, but I don’t have any update on that.”
The good news for student loan borrowers is that wide-scale student loan cancellation isn’t off the table. However, it’s unclear whether that means it’s a strong possibility. Based on Psaki’s comments, it doesn’t appear that Biden has modified his position since extending the student loan payment pause through August 31, 2022. (Student loan payment pause: 5 questions). Biden hasn’t commented recently on any plans for wide-scale student loan cancellation. Rather, he has been focused on targeted student loan cancellation for specific groups of student loan borrowers such as public servants, borrowers with disabilities, and borrowers who got student loan forgiveness through borrower defense to repayment. (Biden could extend the student loan payment pause forever).
Biden still wants Congress to cancel student loans
Biden hasn’t wavered from his position that Congress should cancel student loans for borrowers. (New proposal would extend student loan payment pause and cancel student loans). As a presidential candidate, Biden said that Congress should cancel up to $10,000 of student loans for borrowers. Psaki reminded the public of the president’s position. “And I would note that, again, he would encourage Congress to send him a bill canceling $10,000 in student debt, something that he talked about looking forward to signing on the campaign trail.” Biden has said he would sign any bill on student loan cancellation that Congress sends him. To date, Congress hasn’t sent him a single bill on wide-scale student loan cancellation. (Student loan cancellation and the student loan payment pause are confusing. Here’s what to know).
It’s unclear what student loan cancellation would look like
The idea of “student loan cancellation” sounds exciting to student loan borrowers. However, it’s unclear what the policy, if any, could look like. Will all student loan borrowers get some form of student loan cancellation? Will only certain borrowers get student loan cancellation? What’s the criteria? Are there any limitations? What’s the potential timing? How much student loan forgiveness would there be? There aren’t answers to any of these questions. (Here’s who won’t qualify for $6.2 billion of student loan cancellation). Progressive Democrats are touting $50,000 of student loan cancellation (and in some cases, total student loan cancellation). (Senator: Cancel all student loans). However, Biden has never supported more than $10,000 of student loan forgiveness. If there is any wide-scale student loan cancellation, Biden could decide before the midterm election on November 8, 2022. Why? It could be politically advantageous for Biden to provide more student loan cancellation in advance of the election. With only a slight majority in Congress, Democrats want to maintain power for the next two years of the Biden presidency. Progressive Democrats in Congress have complained that a lack of student loan forgiveness could mean Democrats lose the midterm election.
For now, student loan borrowers should prepare for student loan payments to restart beginning September 1, 2022. There’s no guarantee that Biden will deliver wide-scale student loan forgiveness, but the hope lives on.
Here are some of the best ways to pay off student loans: