President Joe Biden explores more student loan cancellations, but not necessarily a large-scale student loan cancellation.
Here’s what you need to know.
U.S. Education Secretary Miguel Cardona said the Biden administration was considering more student loan cancellations. As reported by TUSEN, Cardona said today, in response to the last question in a high-profile interview, in response to a question about the president using the executive branch to cancel student loans and write off loan debts students, that:
“We recognize that student debt is holding people back,” Cardona said. “And unfortunately, there are many who are in debt and have not even been able to complete their diploma, who do not have the means to pay off this debt. So we’re focused and it’s a priority for me and for President Biden to make sure that part of the conversation is about the loan cancellation. These conversations continue.
Student loan cancellation: what it means
What does this mean for student loan cancellation? Cardona said:
- Biden wants to make sure “loan cancellation” is a priority;
- Conversations with the Department of Education regarding the cancellation of the student loan are ongoing; (How to get approved for a student loan forgiveness)
- The Biden administration understands the major impact of student loans and how student debt is “holding people back”; and
- There are student loan borrowers with “significant debt” who have not completed their education and are unable to repay their student loans.
Cardona’s comments seem to keep the idea of student loan cancellation alive. However, the student loan forgiveness may be target student loan borrowers who “have a lot of debt”, “couldn’t even complete their degree” and “can’t afford to get rid of that debt.” This does not mean that any potential student loan cancellations would be limited to those student loan borrowers. However, that may imply that the Biden administration could focus on that constituency as the next potential beneficiary of the student loan cancellation. (How to get student loan forgiveness even if you don’t work in the public service).
Student loan cancellation: what it doesn’t mean
No mention of large-scale student loan cancellation
Cardona’s comments did not explicitly mention anything about the large-scale cancellation of student loans. (Here’s who qualifies for the student loan waiver right now). The question posed to Cardona was, “You mentioned that the administration is still kind of looking at the executive authority you all have over debt cancellation, what kind of a state is that?” And where do you see this conversation going? It’s important to note that while this may have been the implication, the question did not refer to a “large-scale student loan cancellation” by executive order. Rather, the question referred to “debt cancellation” by means of a decree. Biden could consider targeted student loan cancellation or similar student loan relief through executive action. However, such action may be distinct from the massive cancellation of student loans. Cardona concluded with his statement by referring to exploring the massive student loan cancellation as an “option,” but that was not the centerpiece of his response. (The student loan discount will not be available for these student loan borrowers).
No mention of when the student loan is forgiven
Cardona also did not mention a potential timeline for the cancellation of the student loan. This can mean that there is nothing in the short term related to more student loan cancellations. (How to get a student loan discount).
No mention of who would be eligible for student loan cancellation
While Cardona discussed student loan borrowers with significant debt who have not completed their degrees and are unable to repay student loans, Cardona did not mention which constituency might be next for student loan cancellation. . (Student loan cancellation won’t be available to everyone, but this plan is available now).
Student loans: next steps
Cardona said the Biden administration was open to exploring options to help student loan borrowers, including massive student loan cancellations, but Cardona made it clear that the Biden administration is not waiting for those talks to take place. finalized before acting. For example, Biden canceled $ 4.5 billion in student loans earlier this month when he announced major changes to student loan cancellation. The Biden administration has also acted to extend Pell grants and cancel $ 11.5 billion in student loans since January. The reality is that there is no immediate, clear path for large-scale student loan cancellation. As student loan relief due to the Covid-19 pandemic expires on January 31, 2021, student loan borrowers should not expect a large-scale student loan cancellation on or before that date. (This is how student loan repayment will work when student loan relief ends). This means that student loan borrowers should expect student loan payments to resume – without student loan cancellations – from February 1, 2021. That said, the Biden administration is working to help. student loan borrowers in several ways to improve borrower outcomes. This may include future announcements on targeted student loan cancellation on an ongoing basis.
Whatever happens, make sure you understand these smart ways to save money with your student loans:
Student loans: related reading
Here’s who’s eligible for the student loan waiver right now
How to get approved for a student loan forgiveness
Student loan cancellation will not be available to these borrowers
How to get a student loan forgiveness