Biden Cancels $1.3 Billion Of Student Loans — His Plan For Student Loan Cancellation Is Becoming Clear https://www.forbes.com/sites/zackfr...ncellation-is-becoming-clear/?sh=278b7a1d79c4 President Joe Biden just cancelled $1.3 billion of student loans, and his plan for student loan cancellation is becoming clear. Here’s what you need to know. Student Loans If you have been following the latest on student loan cancellation, Biden cancelled student loans for the second time this month. First, Biden cancelled $1 billion of student loans for 72,000 student loan borrowers. Today, he cancelled another $1.3 billion of student loans for 41,000 borrowers with total and permanent disability. Collectively, Biden has cancelled $2.3 billion of student loans for more than 110,000 student loan borrowers. Biden also won’t make an additional 190,000 student loan borrowers with disabilities show documentation proving their earnings. While many student loan borrowers are applauding Biden’s actions, America has reacted to student loan cancellation in different ways. For example, some student loan borrowers are grateful to get student loan relief. Others say this student loan cancellation doesn’t go far enough. For example, $2.3 billion of student loans represents only 0.1% of the $1.7 trillion of student loan debt outstanding, according to the latest student loan debt statistics. While approximately 110,000 student loan borrowers will get relief, this only represents 0.2% of all 45 million student loan borrowers. Biden’s dual actions indicate his approach to student loan cancellation and could serve as a guidepost for any future student loan forgiveness. Here are the key elements: Biden is focused on federal student loan cancellation Biden’s focus has been on federal student loan cancellation. Both actions to cancel student loans have been focused on federal student loans, not private ones. This doesn’t mean there couldn’t be private student loan cancellation. For example, in the new stimulus package — the American Rescue Plan of 2021 — Congress included a provision that would make any student loan cancellation tax-free for the borrower. So, Congress may be contemplating some form of private student loan cancellation. However, thus far Biden has focused solely on federal student loans to provide student loan relief to borrowers who were the victims of fraud or school closure as well as student loan borrowers with disabilities. Biden is focused on targeting student loan cancellation One of the biggest objections to wide-scale student loan cancellation is the apparent lack of targeting. While critics of student loan forgiveness cite many reasons why student loans shouldn’t be cancelled, they say too many people would qualify for student loan cancellation. Simply put, if everyone gets student loan cancellation, wealthier student loan borrowers with relatively higher income would get the same amount of student loan cancellation as a borrower with limited means. Biden is addressing this issue directly by focusing on two specific constituencies within the broader student loan borrower universe. Rather than target student loan forgiveness based on income, Biden has focused thus far on student loan borrowers who need student loan cancellation due to unique circumstances. Biden is taking a piecemeal approach to student loan cancellation It’s clear that Biden is taking a piecemeal approach to student loan cancellation. Rather than enact wide-scale student loan cancellation for every student loan borrower (or even most student loan borrowers), Biden is carefully targeting segments of the student loan borrower population. This is a different approach than what Senate Majority Leader Chuck Schumer (D-NY) or Sen. Elizabeth Warren (D-MA) have advocated. They want Biden to cancel up to $50,000 of student loans for all borrowers who earn less than $125,000. Most importantly, they want Biden to cancel student loans with the “flick of a pen” through an executive order. While Biden could still cancel student loans by executive order, he doesn’t believe he has the legal authority to do so. That’s why he has called on Congress to cancel $10,000 of student loans immediately. It’s not that Biden doesn’t support wide-scale student loan cancellation — he does — but he has clearly approached student loan cancellation with a piecemeal strategy. Student Loan Cancellation: Next Steps Biden’s actions to cancel student loans indicate his willingness to provide student loan relief. With $2.3 billion of student loan debt cancelled, Biden has taken early steps to help student loan borrowers in need. Will your student loans get cancelled? While critics say Biden should cancel more student loan debt to help more student loan borrowers, Biden is going his own way and at his pace. There is no indication that he has plans for wide-scale student loan cancellation by executive order. This means that Congress would need to act to implement wide-scale student loan forgiveness. However, Congress hasn’t formulated a singular, bipartisan proposal to cancel student loan debt. If Schumer thinks his colleagues will rally around the Schumer-Warren student loan bill, then Schumer should bring the bill to the Senate floor for a vote. However, currently, it’s unclear whether Schumer could get at least 50 votes, let alone 60 votes, to pass student loan cancellation with $50,000 of student loan debt forgiveness. The next step for you is to take control of your student loans. You can wait for student loan forgiveness, but you can also make sure you understand all your options for student loan repayment. Here are some potential options to consider to save money: Student loan refinancing (lower interest rate, lower monthly payment) Income-driven repayment plans (lower monthly payment for federal loans) Public service loan forgiveness (student loan forgiveness for federal loans)
To be honest, if they put in some type of tax for loan forgiveness then I think this could work to boost income for hundreds of thousands of families which could mean more taxable revenues from those that claim interest deductions on student loans (not all eligible). However this forgiveness is meaningless if they don't change the way federal subsidized and unsub loans are given. No more federal loans for private universities, only for state schools or junior colleges. That alone will cut debt in half.
To be honest, I’m not sure how debt cancellation works. Does cancellation get applied to the debt or is it like an in agency erasure. Interestingly, student loans are the only area where the federal government can legally make a profit. And it does.
I am too lazy to read the law so hopefully they will put out a summary haha... Since most loans get deferred or there is temporary forebearance of interest , a lot of interest gets capitalized and government ends up making a shit load of money on performing loans, especially ones that places like SoFi step in and consolidate. I hope they just dont wash out loans to meet a cliche campaign promise and make some real changes. You should get help from the government for college financing but not to go to an overpriced private college and not for the government to make profits off of.
And no more loans at state schools for dubious degree programs and degrees unless the data clearly demonstrates that the average graduate is achieving sufficient earning power to repay the loan. That alone will eliminate three quarters of the remaining half.
https://www.forbes.com/sites/zackfr...-student-loan-forgiveness-from-latest-budget/ Biden Drops Student Loan Forgiveness From Latest Budget The writing is on the wall about student loan cancellation. Here’s what you need to know—and what it means for your student loans. Student Loans According to the Washington Post, President Joe Biden will not include any student loan cancellation in his annual budget. While the annual budget, which is expected at the end of next week, only contains major policy plans that have already been released by the Biden administration, it’s another major setback for student loan cancellation. As a presidential candidate, Biden called for Congress to cancel up to $10,000 of student loans for student loan borrowers, but hasn’t enacted any policy for student loan cancellation through an executive order. The exclusion of student loan cancellation isn’t a surprise. Based on the latest news on student loan cancellation, it’s easier to read the writing on the wall about where Biden stands on his executive authority to cancel student loans. It’s not that Biden doesn’t support student loan cancellation; he does. However, Biden wants Congress — not the president — to enact student loan cancellation through legislation. In aggregate, since becoming president in January, Biden has not included wide-scale student loan cancellation in: his annual budget plan; stimulus packages; or infrastructure package. This should be a clear message that it’s unlikely Biden will enact student loan cancellation unilaterally without further authorization from Congress.
Someone should tell him he's reaching for one term.As of this moment he does not have my vote for a second term.
I never thought Sanders or Biden or any of them would really be able to wipe out student loans..... It was just a cliche slogan like "mexico will pay for it".