President Joe Biden has canceled $400 billion in student loans, according to a senior Congressional Republican.
Here’s what you need to know — and what it means for your student loans.
Will Biden embrace large-scale student loan forgiveness? Millions of student borrowers await his decision, which is expected within weeks. However, with all the debate about large-scale student loan forgiveness, what if Biden had already canceled $400 billion in student loans? Rep. Virginia Foxx (R-NC), the top Republican on the House Education and Labor Committee, writes that Biden has already approved $400 billion in large-scale student loan forgiveness in a “one-shot feather”. According to Foxx:
- Forget the debate over the potential large-scale cancellation of student loans; it’s already happening;
- Student borrowers received $150 billion in student loan forgiveness from suspension of student loan payments;
- Suspension of student loan payments and revised rules for civil service loan forgiveness equal $400 billion in student loan forgiveness;
- Widespread cancellation of student loans ‘will lead to more inflation-filled deficit spending’;
- Tuition fees will continue to rise because colleges and universities know there may be future student loan forgiveness; and
- Biden has used student loan forgiveness to offer “retroactive free college” to high-income households who hold 60% of canceled student loan debt.
Student Loan Forgiveness: Limited waiver will forgive $211 billion in student loans
According to Foxx, the limited waiver of student loan forgiveness will forgive $211 billion in student loans for more than 4 million student borrowers, many of whom have never been eligible for student loan forgiveness. Foxx is referring to Biden’s announcement last fall that he would make major changes to student loan forgiveness, including a one-time waiver for student loan forgiveness. As a result, more student borrowers will be eligible for student loan forgiveness due to relaxed requirements. For example, until October 31, 2022, the Biden administration will allow federal student loan borrowers to count previously ineligible student loan payments in the “credit” for student loan forgiveness. This includes payments such as late payments, partial payments, and student loan repayments made under the wrong repayment plan. Foxx argues that this retroactive student loan forgiveness, combined with the current student loan payment pause and potential future student loan forgiveness, is a “political ploy” to win votes for Democrats in the mid-election. November term.
Student Loan Cancellation: Next Steps
Biden decides whether or not to enact large-scale student loan forgiveness, which could include $10,000 in student loan relief for borrowers. That said, congressional progressives are pressuring Biden to consider forgiving a $50,000 student loan. Excluding the pause in student loan payments, Biden has forgiven more than $25 billion in student loans. Last week, the Biden administration also agreed to forgive $6 billion in student loan debt. Foxx argues that Biden has already enacted de facto student loan forgiveness up to $5,000 for each student borrower (and $10,000 for medical school graduates). Proponents of large-scale student loan forgiveness say it will stimulate the economy, not increase inflation and help borrowers have extra money to get married, start a family, buy a house and save for retirement. Foxx wants the Consumer Financial Protection Bureau “to sue the Department of Education for its predatory lending practices or stop student loans altogether.” The next step for student borrowers is the end of temporary student loan relief, which ends August 31, 2022. This means that federal student loan repayments resume starting September 1. Here are some popular ways to save money and pay off student loans: