Student loan from cancellation from Joe Biden means these 3 things.
Here’s what you need to know.
In the past week, Biden has cancelled $6.8 billion of student loans. This brings his total student loan cancellation to more than $9 billion since becoming president in January. (Learn here whether you qualify for $9 billion of student loan cancellation). Here are 3 things Biden’s student loan forgiveness means for your student loans:
1. Student loan forgiveness hasn’t been wide-scale student loan cancellation
Biden has focused entirely on targeted student loan cancellation rather than wide-scale student loan cancellation. Targeted student loan cancellation means specific groups of student loan borrowers get student loan forgiveness. Wide-scale student loan cancellation means that every student loan borrower or most student loan borrowers get student loan forgiveness. To date, Biden has cancelled student loans for two categories of federal student loan borrowers. This includes student loan borrowers with a total and permanent disability and student loan borrowers who were misled by their college or university under borrower defense to student loan repayment.
2. It’s less likely there will be wide-scale student loan forgiveness
To many student loan borrowers, it feels like student loan cancellation got cancelled. Many student loan borrowers who are struggling financially are asking: “Should you stop paying student loans?” After months of waiting for student loan forgiveness, it never came. While Biden has actively cancelled student loan debt, Biden hasn’t enacted wide-scale student loan cancellation. Biden supports $10,000 of student loan cancellation for student loan borrowers, but he has said Congress should cancel the student loan debt. Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) have championed student loan forgiveness up to $50,000 for student loan borrowers, but legal issues remain. Student loan cancellation may help more student loan borrowers, but it doesn’t mean that Biden will cancel everyone’s student loans. While it’s possible that Biden can enact both targeted student loan cancellation and wide-scale student loan cancellation, there’s no clear indication that he will enact the latter. The U.S. Department of Education has been preparing a legal analysis and recommendation on the president’s ability to cancel student loans unilaterally without further authorization from Congress, but that non-binding memorandum hasn’t been made public. Biden has successfully cancelled student loans on a targeted, piecemeal basis, and there is no indication that he will stop doing so. Student loan cancellation has become a focus on Capitol Hill. However, at the same time, it seems like Congress hasn’t prioritized student loan forgiveness. For example, Congress is set to pass a historic budget deal, but wide-scale student loan forgiveness has been excluded — again.