Biden will call on Congress to forgive $10,000 in student debt

President-elect Joe Biden campaigns for Democratic Senate candidates Jon Ossoff and Raphael Warnock at a pre-election rally in Atlanta, Georgia on January 4, 2021.

Jonathan Ernst | Reuters

President-elect Joe Biden will ask Congress to immediately cancel the $ 10,000 student debt for all borrowers and extend the payment hiatus, which is due to expire this month, an adviser told reporters Friday afternoon.

The $ 900 billion pandemic relief package passed in December did not include an extension of the student loan payment hiatus, which has been in place since March and expires at the end of the month has left many borrowers unable to make their payments.

In a recent Pew survey, 6 in 10 borrowers said they would find it difficult to start paying their student loan bills again in the coming month. The vast majority – or around 90% – of federal student loan borrowers took advantage of the government’s opportunity to suspend their payments during the pandemic, data shows.

How long Biden’s payment break will be extended remains unknown.

The President-elect’s pledge to cancel US $ 10,000 student debt matches his campaign promises despite mounting pressure to cancel more debt and bypass Congress.

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Administrative or Legal Forgiveness?

Senate Supreme Democrat Chuck Schumer, DN.Y., calls on Biden to lend $ 50,000 per borrower on the first day of his presidency. “All you need is the stroke of a pen,” said Schumer in December. “You don’t need a congress.”

Meanwhile, Senator Elizabeth Warren, D-Mass., Recently described student debt relief as “the most effective economic stimulus available through executive action.”

Not everyone agrees. Experts say Biden would likely face legal challenges if he canceled the debt himself.

And now that the Democrats have secured a majority in Congress, the legislative path seems more hopeful. But it is a long way from the hopeful to the borrower who sees their debt reduced or eliminated.

Even with the two Senate seats won by the Georgia Democrats, the party has just achieved a majority and needs Vice President-elect Kamala Harris to garner 51 votes against the 50 Republicans.

Not all Student Debt Relief Democrats may be on board, and even if they do, Senate Rules of Procedure generally require laws to get 60 votes. It will be hard to get nine Republicans on a debt anniversary.

“With democratic scrutiny of government, Republicans are likely to reaffirm their interest in the public deficit and government spending,” said Laurel Harbridge-Yong, associate professor at Northwestern University.

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However, there may be a way to bypass these rules. A once-a-year legislative process called budget reconciliation will allow Democrats to pass bills by simple majority. In 2010, for example, the Democrats pushed through the final version of the Affordable Care Act. The Republicans, for example, pushed through their massive tax cuts in 2017.

But there are limits to this method, says Ryan D. Doerfler, a law professor at the University of Chicago. “Democrats can only use reconciliation procedures three times in the next two years,” he said. Since this process can only be applied once a year, there is usually a lot of competition as to what to include and that will be especially the case during the pandemic.

Reconciliation legislation must also address budget changes, and senators can try to block any provisions they believe are not.

Given the uncertainty surrounding trying to pass a student debt cancellation law, lawyers and Democrats continue to urge Biden to administratively terminate the loans, saying borrowers cannot afford to wait for relief.

“President Biden has a historic opportunity to improve the lives of tens of millions of American families struggling in the midst of a national crisis,” said Seth Frotman, who served as student loan ombudsman for the Consumer Financial Protection Bureau during the Obama administration.

How Would $ 10,000 In Student Loans Affect You? If you’d like to share your story, please email me at annie.nova@nbcuni.com

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