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What if Biden doesn’t cancel student loans?

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What if President Joe Biden does not to cancel student loans?

Here’s what you need to know.

Student loans

Biden may not cancel your student loans. Despite lobbying from progressives and pressure to impose up to $ 50,000 in student loan forgiveness, Biden, in the end, could decide not to cancel student loan debt. Most recently, Biden did not include the student loan cancellation in the latest stimulus package. That doesn’t mean he doesn’t want your student loans canceled. Biden supports the forgiveness of $ 10,000 in student loans, and since becoming president he has canceled $ 2.3 billion in student loans. However, he may not be able to unilaterally decree the cancellation of the student loan by decree without further authorization from Congress. The answer to that question, or at least a legal opinion, will be at the center of a memorandum that US Secretary of Education Miguel Cardona will deliver to the president in the coming weeks. The Education Department, headed by President Donald Trump, wrote in a legal note that the president does not have the existing unilateral power to cancel student loans. Biden’s education department may come to the same conclusion or a different conclusion. However, the education department can only recommend; Biden will be the final decision maker.

If Biden doesn’t cancel the student loan, what could happen next? Here are three scenarios:

Option 1: Congress cancels student loans

Remember: there are two main ways to cancel a student loan. If the president cannot write off student loans, Congress would be the appropriate federal branch of government that could write off student loan debt. Currently, Progressive Democrats in Congress have rallied around a proposal from Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) to set aside up to $ 50,000 in student loans. According to the US Department of Education, up to $ 50,000 of student loan cancellation would completely write off student loans for 36 million student borrowers. Above all, this proposal is only for federal student loans and for student loan borrowers who earn up to $ 125,000 per year. The reality, however, is this student loan proposal will not become law. Congress will not pass any law to write off up to $ 50,000 in student loan debt per borrower. Why? There are not enough votes in Congress. There are also unlikely to be enough votes in Congress to write off student loan debt of any amount.. This may come as a surprise. This is not to say that there is no support to reform higher education or to help borrowers manage their student debt. On the contrary, it means that if they were put to a floor vote, Democrats would likely not be able to get enough votes to pass legislation to cancel student loans on a large scale. So what happens next? Congress could draft a bill that moderate Democrats and perhaps some Republicans could support. It could be a tall order, but finding more common ground on student loans will be the best bet in getting student loans canceled.


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