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President Joe Biden (Photo by Scott Eisen / Getty Images)
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President Joe Biden really canceled almost $ 70 billion in student loans.
Here’s what you need to know – and what it means for your student loan forgiveness.
Student loans
If you follow the latest headlines on student loans, you’ll know that Biden has aggressively canceled nearly $ 10 billion in student loans. Over the past eight months, Biden has enacted targeted student loan cancellation for hundreds of thousands of student loan borrowers. That includes over $ 1.5 billion in student loans canceled this way, and as of this month, $ 5.8 billion more for these student loan borrowers. At the same time, student loan borrowers whose student loan has not been canceled are asking, “Will my student loans be canceled?” The latest statistics on student loan debt show that there are 45 million student loan borrowers who collectively owe $ 1.7 trillion. For many student loan borrowers, they either want the full cancellation of their student loan, including all of their private and federal student loan debts. Or, they back a proposal championed by Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) that would force Biden to write off up to $ 50,000 per student loan borrower per through a decree. If that happens, the US Department of Education estimates that 36 million student loan borrowers would have all of their federal student loans canceled completely. However, what if Biden has already passed a large-scale student loan cancellation? What if this student loan cancellation meant that Biden canceled nearly $ 70 billion in student loans? Let’s explore.
Biden student loan cancellation is more than you might think
If you ask most people if Biden enacted a full-scale student loan cancellation, the answer would be an emphatic “noâ€. Large-scale student loan cancellation means that all student loan borrowers or most student loan borrowers have obtained a student loan cancellation. To date, Biden has publicly stated that he does not believe he has the legal authority to cancel student loans for all student loan borrowers without further authorization from Congress. As Biden takes charge of $ 10,000 student loan cancellations per student loan borrower, he says Congress should act to pass student loan cancellation and he would gladly sign student loan legislation. The issue is a legal one encapsulated in the Higher Education Act of 1965, and more importantly, in the Constitution of the United States. Warren and Schumer, who like Biden also hold law degrees, say the Higher Education Act of 1965 already grants the president existing unilateral power to enact unlimited student loan cancellations for all students. student loan borrowers. While this issue can be temporarily settled when the Department of Education issues a recommendation on the president’s legal capacity to enact a student loan forgiveness, only a court can make a final ruling on the law. However, Biden – with help from Congress – enacted a full-scale student loan cancellation, and chances are you’ve already got your student loan canceled.
How Biden enacted $ 70 billion in student loan cancellations for millions of student loan borrowers
It might not be, but you might have already had your student loan canceled. Canceling student loans has become a priority at Capitol Hill. When Congress passed the bipartisan Cares Act – the $ 2.2 trillion stimulus package in March 2020, Congress provided significant student loan relief, including:
- no mandatory federal student loan payments;
- no new student loan interest; and
- no collection of defaulted student loan debts.
Although this student loan relief is temporary, Congress effectively converted the student loan relief into student loan cancellation. How? ‘Or’ What? Temporary student loan forbearance, in and of itself, seems to simply suspend your student loan payments. However, Congress also included a lesser-known provision that says any non-payment during the Covid-19 pandemic will “count†for the purposes of student loan cancellation. Did you say student loan forgiveness? Let’s break this down further. For federal student loans, you can get student loan forgiveness through an income-based repayment plan and the public service loan forgiveness program, among others. An income-based repayment plan such as IBR, PAYE, REPAYE, or ICR grants you federal student loan forgiveness after 20 or 25 years, provided you make full monthly student loan payments and meet other requirements. . Similarly, the civil service loan forgiveness program requires, among other things, 120 monthly student loan payments. With the original Cares Act student loan relief scheduled to expire on September 30, 2020, President Donald Trump has twice extended the student loan relief, as has Biden. Now, this temporary student loan forbearance is due to expire on January 31, 2022. This is a big win for student loan borrowers because effectively, if you haven’t made a single federal student loan payment since March 2020, you are in will get almost two. years of student loan repayment “counted†in the requirements of an income-tested repayment or government loan forgiveness program, for example. The “count†of your student loan non-payments is actually a student loan forgiveness because you weren’t required to make any student loan payments, but you got credit for making those student loan payments. . In total, the Department of Education says more than 40 million student loan borrowers have collectively secured $ 5 billion in student loan cancellations for each month of the Covid-19 pandemic. Biden extended student loan relief for one year, equivalent to $ 60 billion in student loan cancellations in addition to the nearly $ 10 billion in student loans it canceled through targeted student loan cancellation. (Here’s what canceling the Biden student loan means for your student loans).
Did Biden Really Write Off $ 70 Billion In Student Loan Debt?
Some will dispute whether Biden canceled $ 70 billion in student loans. For example, it can be argued that Congress canceled student loan debt through the Cares Act and that Trump and Biden simply extended that student loan relief. Others will say that Biden didn’t even write off nearly $ 10 billion in student loan debt because that student loan cancellation was based on existing law and his education department, headed by Secretary Miguel. Cardona, has implemented all student loan debt relief. Still others will say that even if Biden forgives some student loan debt, Biden’s student loan forgiveness is only a minor percentage of total student loan debt and still excludes millions of student loan borrowers. Others will say that unless all of their student loans, or up to $ 50,000 in student loans, are canceled outright, it does not count as a true student loan cancellation. Whatever you think of student loan cancellation, whether you think it’s good or bad public policy, these are the latest numbers on student loan cancellation. Biden has written off more student loan debt than any president and expects to write off more student loan debt throughout his administration. While student loan cancellation may help more student loan borrowers, that doesn’t mean Biden will write off everyone’s student loan debt. Immediate, large-scale student loan cancellation is less likely for all student loan borrowers, or even most student loan borrowers. Instead, Biden is more likely to ensure that student loan borrowers are fairly shaken up, have access to streamlined student loan repayment, get more student loan cancellations, and other forms of relief. student loan that will bring them closer to the American dream.
The large-scale Biden student loan cancellation may have already happened. With student loan forbearance expiring in a few months, make sure you’re ready. Get your student loans in order and understand all of your student loan repayment options. Here are some popular ways to save money:
