3 ways Joe Biden could cancel student loans
Will I get a student loan discount? Will Joe Biden cancel my student loans?
Here’s what you need to know.
There is more and more discussion about the possibility of canceling student loans next year. However, there is no guarantee that your student loans will be canceled or canceled. That said, Biden has a plan for your student loans. If Biden is pursuing a student loan program, here are three ways Biden could write off student loan debt:
1. Cancels student loans by law
The traditional way to forgive student loans is to pass a law. A member or members of Congress propose legislation to cancel student loans, and Congress votes “yes” or “no” on the proposal. If approved, Biden, as president, could sign such a bill. To date, several proposals have been made to cancel student loan debt. However, none became law. These include, among others:
- Forgive up to $ 30,000 in student loans
- Forgive up to $ 10,000 in federal student loans
- Forgive up to $ 10,000 in private student loans
- Forgive up to $ 10,000 in student loans to borrowers directly affected by the Covid-19 pandemic
- Cancel all $ 1.6 trillion in student loans, including federal and private student loans
The main question on student loan forgiveness in Congress is which party will control Congress in the next legislature. Sen. Mitch McConnell (R-KY) and Sen. Chuck Schumer (D-NY) will lead their respective parties, but it’s not yet clear whether Republicans or Democrats will control the Senate. If the Republicans control the Senate, the government will be divided and the prospect of forgiveness of student loans may decline. If Democrats control the Senate, the chances of student loan forgiveness may be higher.
2. Cancel student loans as part of a stimulus program
The second option is to write off student loans as part of a stimulus package. This process would also occur in Congress through legislation, but it differs from the first option, which would be separate and stand-alone legislation. If the cancellation of student loans is part of a larger stimulus package, both parties may agree to cancel the student loans. There are many different economic priorities in a stimulus bill, including second stimulus controls, unemployment benefits and public and local aid, among other priorities. Student loans are probably not at the top of the economic wish list for Republicans or Democrats. Most Democrats support some form of student loan forgiveness, but most would prioritize second stimulus checks or enhanced unemployment benefits over student loans. If Republicans were to consider some form of student loan forgiveness (separate from existing federal programs such as the public service loan forgiveness), Republicans may limit the amount of the forgiveness, if a forgiveness is linked to the Covid-pandemic. 19 and which borrowers may be eligible.
3. Cancel student loans through executive action
This third option is the most controversial of the three options, although some have claimed that it is relatively straightforward and easy to implement. Their argument goes something like this: The Higher Education Act, which is an act of Congress that includes student loans, allows the United States Secretary of Education (who is part of the executive branch of the federal government) to cancel student loan debt. Opponents of this argument claim that under the separation of powers, only Congress (the legislature) has the “power of the stock market,” and therefore only Congress can decide whether or not to cancel student loans. Schumer and Senator Elizabeth Warren (D-MA) have proposed legislation to give President Donald Trump the legal power to write off student loans of up to $ 50,000. However, Congress did not pass such legislation, and if Republicans continue to control the Senate, the proposal is unlikely to pass either. If Biden used executive action to cancel student loans, there would likely be legal challenges (based on a separation of powers argument), which could delay such a student loan forgiveness for borrowers.
Presidential candidate Biden backed the cancellation of student loans during the election campaign. However, there is no guarantee that Biden will cancel student loans as president. When Biden becomes president on January 20, 2021, he could face a struggling economy, a weak job market and an ongoing Covid-19 pandemic. As president, Biden will weigh several broad economic approaches. This can include student loans, but it can also focus on other economic measures. If Biden acts to cancel student loans, whether through legislative or executive action, there is also no guarantee that this will happen on the first day of his presidency or even within the first 100 days.
Pay off student loans
Will I get a student loan discount? This is a popular question and many borrowers rely on the cancellation of their student loans. However, don’t expect a student loan forgiveness. Biden or Congress can cancel student loans, but there is no guarantee if or when. In the meantime, focus on a student loan repayment strategy. Here are some great places to start paying off student loans, all of which are free: