This story is developing.
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.
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:
This should be a clear message that it’s unlikely Biden will enact student loan cancellation unilaterally without further authorization from Congress.
5 reasons why Biden won’t enact student loan cancellation
There are at least five reasons why Biden likely won’t enact wide-scale student loan cancellation:
- Biden would have cancelled student loans already.
- Biden has focused on $2.3 billion of targeted, piecemeal student loan cancellation.
- The end of the Covid-19 pandemic may reduce the odds for student loan cancellation.
- The student loan payment pause is expected to expire September 30, 2021.
- Democrats have focused on other forms of student loan forgiveness such as proposing to forgive student loans with 4 changes.
Student Loans: Next Steps
There’s no guarantee either way whether Biden will forgive student loans. While the budget proposal is only one indication, it’s possible that Biden could cancel student loan debt even if it’s not included in his budget. That said, Biden has decided not to include wide-scale student loan forgiveness in any of his major stimulus or infrastructure packages. If student loans don’t get cancelled, which is a high likelihood, then make sure you understand all your options for student loans and student loan repayment. Here are some potential options to consider, all of which have no fees: