Your student loans can be canceled, but probably not by executive order
You can get student loan cancellation, but it probably won’t happen by decree.
Here’s what you need to know.
There is no shortage of complaints from members of Congress that “Biden can cancel student loansAnd all it takes is a ‘stroke of the pen’. It almost became a meme and something that is taken for granted. It’s like everyone is waiting for student loan cancellation, but somehow the president is delaying things for some unexplained reason. Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) have said the same thing, and they want Biden to do it cancel $ 50,000 in student loans by decree. In the House, Representative Ilhan Omar (D-MN), Representative Alexandria Ocasio-Cortez (D-NY) and Representative Ayanna Pressley (D-MA) echoed similar sentiments.
So what’s the problem?
More complicated student loan cancellation
For some, student loan cancellation is obvious. Supporters say it will boost the economy, reduce disparities, help build families, encourage home buying and encourage retirement savings. Opponents say The cancellation of student loans is a massive wealth redistribution program that will further increase the national debt and reward borrowers who have defaulted on their student loans. Since Democrats control Congress and the White House, one would assume that canceling student loans – a major political goal – would be inevitable. After all, Biden and Democrats in Congress both want student loans canceled. For example, Biden wants student loans canceled immediately. Democrats want it too. However, canceling a student loan is not that simple. There are major differences between supporters when it comes to who should be eligible for the student loan forgiveness and how much student loan forgiveness there should be. There is also a major difference as to who will implement the cancellation of student loans under the procedure. Biden wants Congress to cancel student loans and he has said he will sign a law that Congress sends to his office. So if Democrats, Congress, and Biden want student loan cancellation, why the delay? It all comes down to strategy.
Why canceling a student loan probably won’t happen by decree
Schumer and Warren, by their own admission, led a campaign of “Public pressure” against Biden, a fellow Democrat. And this despite the fact that, for the most part, Biden, Schumer and Warren support the same political goal: canceling student loans. Yes, they differ on the amount of the student loan forgiveness (Biden wants $ 10,000 per borrower, while Schumer and Warren want $ 50,000). However, they both subscribe to the notion of at least some student loan cancellation. Schumer has now admitted that Democrats are actively seeking to pressure the president to unilaterally cancel student loans without further authorization from Congress. They cite the 1965 Higher Education Act, which they say already grants the US Secretary of Education unlimited power to write off any amount of student debt.
Biden was very clear that he disagreed that a president could simply write off $ 650 billion in student loan debt – Warren’s estimated cost to write off up to $ 50,000 per student borrower – by executive order . Even if a president had that authority, Biden said he probably wouldn’t. “I think that’s pretty moot,” Biden said in December, referring to whether a president has the unilateral power to simply cancel large-scale student loans. “I’m not sure of it. I’m unlikely to do that. Biden’s press secretary Jen Psaki said Biden “already stepped by executive action first day [as president], and he would look to Congress for the next steps. That said, while Biden prefers Congress to act, Biden considers options to write off student loan debt through management action.
More importantly, it’s not about whether Biden wants to use executive power. Legally, he may not be able to. This is the current position of his administration. Schumer and Warren, who are both lawyers, disagree. Therefore, the cancellation of student loans could very well be decided by the courts, as Republicans in Congress and other opposing stakeholders would likely take legal action if the president sought to cancel student loans by executive order. Given this factual pattern – the respective positions of Congress and Biden as well as questionable legal authority – it is not clear why Democrats have sought “public pressure” as their primary strategy. Public advocacy is common in Washington and influences policy outcomes. Here, however, Biden already shares the same political goals. It is not necessary to convince the president of the merits of canceling a student loan. On the contrary, the Democrats’ strategy can be reduced to a discussion of procedure. There are substantive questions about the amount of the cancellation, but the most important argument is whether the president can unilaterally cancel student loans en masse.
Will you get your student loan canceled?
If you’re wondering if you’ll get a student loan cancellation, there are two outcomes: either Biden cancels student loans through executive action, or Congress cancels student loans through the legislative process. . This includes cancellation of student loans in new stimulus package. The second result is the default approach and something that Congress could address tomorrow. Strikingly, Congress refused to pass legislation on the cancellation of student loans. When asked if Congress would pass a law to cancel student loans, Schumer ignored the question and said earlier this month: “The easiest way to do it is for President Biden to do it. ‘just a stroke of a pen.’ It’s bad news for student loan cancellation. The majority leader in the US Senate should be able to answer the question of whether Congress intends to put a vote on canceling student loans. “Pressuring the President” to do something that we don’t know he can legally – even if he wanted to – does not bode well for the prospect of canceling dozens of student loans. million student borrowers.
It is increasingly clear that Senate Democrats are not convinced that Congress can pass legislation to cancel student loans. This suggests that Democrats in Congress – mostly moderate Democrats – do not fully support student loan cancellation. While it is possible that Biden will cancel student loans through management action, there is no indication that he will do so now or in the future. So if the game plan is to rely on annulment by executive action and not pass legislation, supporters of the student loan forgiveness may face great disappointment. Make sure you have a student loan game plan because there is no guarantee that Congress will cancel your student loans, nor the amount of student loan forgiveness. Instead, start with these three options, all at no cost: