Will President Joe Biden cancel student loans today?
Here’s what you need to know — and what that means for your student loans.
Biden could decide on a large-scale student loan forgiveness any day. More than 40 million student borrowers are wondering if today is the day for Biden to cancel student loans. The Biden administration has remained silent on Biden’s plans for a large student loan forgiveness. While Biden has written off billions in student loan debt, he has yet to approve large-scale write-offs for students. That could change this week.
Student loan forgiveness: Biden forgave $32 billion in student loans
As president, Biden canceled $32 billion in student loans:
- Defense of the borrower until reimbursement: $13 billion in student loans for 1 million student borrowers who received a student loan discharge through Borrower Defense for Student Loan Repayment and School Closures;
- Public service loan forgiveness: $9.6 billion in student loans for 175,000 student borrowers; and
- Total and permanent disability: $9 billion in student loans for over 425,000 student borrowers due to total and permanent disability.
Despite this large amount of student loan relief, Biden’s student loan forgiveness did not apply to the 45 million student borrowers. Instead, Biden gave targeted student loan forgiveness to specific groups of borrowers. For example, last week Biden canceled $3.9 billion in student loans through defending borrowers from student loan repayment.
Cancellation of student loan: the details
If Biden enacts large-scale student loan forgiveness, that could include $10,000 in student loan forgiveness for all federal borrowers who earn up to $150,000. For that to happen, Biden would have to allow a proposal from the US Department of Education to be implemented. If Biden goes through with a broad student loan forgiveness, student borrowers could get student loan relief in just 45 days. Borrowers who have provided their details to the Education Department may be given priority. Other student borrowers could apply online and declare their income themselves. Alternatively, Biden could endorse a different plan for student loan forgiveness or decide against enacting broad student loan forgiveness. The president could also rely on the provisions of a new Republican plan to cancel student loans.
Student Loan Payment Suspension: Next Steps
Student loan forgiveness isn’t the only major issue Biden will address. The student loan payment break ends August 31. Biden has pledged to announce his decision on student loan forgiveness before the student loan payment break expires. Education Secretary Miguel Cardona has confirmed that Biden will decide whether to extend the student loan payment break this week. If Biden extends the student loan moratorium, student borrowers will not have to restart federal student loan payments on September 1, 2022. Thus, student borrowers should expect a response on student loan forgiveness and the moratorium on student loans in the days that followed. Will student loan forgiveness take place today? It depends. Will Biden continue to cancel student loans? Yes, but the question is whether it will be targeted student loan forgiveness or general student loan forgiveness. Borrowers hope for the latter but should expect the former. Regardless of the president’s decisions, millions of student borrowers need to come up with a clear game plan for student loan repayment. Why? Student loan relief, while helpful, may not eliminate all of your student loan debt. So start with these popular ways to save money on your student loans: