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President Joe Biden on Friday presented his budget proposal of $ 6 trillion for fiscal year 2022. The proposal primarily covers programs that were already on the table, such as improving U.S. infrastructure, and omits several of Biden’s large-scale campaign proposals – including student loan issuance.
On the campaign trail, Biden suggested he’d like to waive $ 10,000 in student loans per federal borrower, and he has been vocal about the student debt burden. With this new budget proposal, however, experts are now asking whether a student loan waiver is possible in the near future.
$ 10,000 student loan forgiveness looks less likely
That Biden is leaving forgiveness out of the budget is not an indication that he will not be granting student loans, but it is an indication that providing student loans is not an immediate priority.
While congressional forgiveness is still possible, Biden would face a congressional stall, with the question split along party lines and even some Democrats divided on whether or how much student debt should be forgiven.
Biden could instead take executive action to cancel the student debt, but that too is still in question. Education Minister Miguel Cardona oversees a legal review of Biden’s powers to cancel debts, but the government has been silent on the matter since early April. This, combined with the budget proposal, could indicate that the comprehensive student loan waiver measures proposed during Biden’s campaign are off the table for the time being.
The budget could make higher education cheaper in other ways
Although student loan remission is not included in the budget, the document includes funding for the college plans listed in Biden’s American Families Plan. Included in the budget are plans to launch a two-year free community college and investment in the affordability of the college for students attending historically black colleges and universities (HBCUs), tribal colleges and universities (TCUs), and minority service institutions (MSIs).
Another big suggestion is to increase the maximum Pell grant amount by $ 1,875 – granting the $ 1,475 increase included in the American Families Plan, plus an additional $ 400 increase from the budget itself. This would be the largest represent a unique increase in the history of the scholarship and “represents a significant first step towards achieving the President’s goal of doubling the scholarship”.
Smaller proposals tend to become politics
Many student loan borrowers rely on the student loan option. While Biden’s biggest proposals for forgiveness remain pending, the government has reiterated its commitment to explore other ways in which student loan borrowers can find relief.
The budget specifically mentions that the government will work with Congress to improve income-oriented repayment plans and public service lending (PSLF), both of which cancel some of borrowers’ debts after several years of payment. The U.S. Department of Education has already scheduled hearings to review some of the most prominent federal programs that offer targeted student loan cancellation, including Borrower Defense for Repayment, PSLF, and Completion and Permanent Disability Dismissal (TPD).
“The main job of the Department of Education is to serve students and borrowers,” Cardona said in a press release. “That means re-examining a number of regulations to ensure that they don’t create unnecessary barriers, but rather to ensure that institutions and programs serve our students well.”
Any revisions to existing programs could also be informed by members of Congress, dozen of whom recently signed a letter to Cardona calling for reforms to the PSLF. The following changes were proposed in this letter:
- Make all federal loans eligible for the program.
- Make any repayment plans for the program in question.
- Forego the employment restrictions at the time of repayment.
- Borrowers automatically qualify for the program.
Learn more:
source https://collegeeducationnewsllc.com/what-bidens-annual-budget-means-for-student-loan-forgiveness/
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