Biden Will Push For $10,000 In Student Loan Forgiveness And Extension Of Student Loan Pause

WILMINGTON, DELAWARE – JANUARY 08: US President Joe Biden delivers remarks after speaking … [+] announced cabinet candidates who will complete its economic team, including Secretary of Commerce and Labor, on January 8, 2021 at the Queen Theater in Wilmington, Delaware. Biden announced that he will nominate Rhode Island Governor Gina Raimondo as Secretary of Commerce, Boston Mayor Martin J. Walsh as Secretary of Labor and Isabel Guzman, a former Obama administration official, as Head of Small Business Administration. (Photo by Chip Somodevilla / Getty Images)

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President-elect Joe Biden’s transition team announced Friday that, as one of its first acts, he would direct the Department of Education to extend the existing moratorium on payments, interest, and collections on student loans and urge Congress to waive $ 10,000 Student loan waiver per borrower.

The additional relief for student loans could be translated into a larger stimulus package, which now has a better chance of becoming law with a democratic takeover of the Senate. The current moratorium on payments, interest and student loan collections was first enacted in March 2020 and is due to expire on January 31, after two extensions by the Trump administration.

It is unclear how far a new extension would go, despite Congress Democrats previously calling for an extension to September 2021. Congress Democrats could also potentially extend the payment freeze to additional student loans exempted from the original CARES legislation, such as commercially-issued FFEL program loans and federal Perkins loans, though Biden has not confirmed whether he would push for them.

Biden has consistently advocated $ 10,000 student loan relief for borrowers, arguing that doing so would help promote student debt relief specifically to benefit those on lower incomes. Cancellation of $ 10,000 student loans would eliminate all outstanding student loans for over 16 million people, representing more than a third of all current borrowers. $ 10,000 debt relief would also reduce loan balances by 50% for an additional 9.3 million people, an additional 20 percent of all borrowers. As a result, over 50% of outstanding student loan borrowers could experience significant relief with only $ 10,000 in student debt.

But progressive Democrats are pushing for broader relief. Last month, Rep. Ayanna Pressley (D-MA), along with several other progressive Democrats, tabled a resolution in the House of Representatives calling on Biden to cancel $ 50,000 in federal student debt for every borrower who uses executive powers, reflecting a similar resolution introduced in the Senate by Senators Elizabeth Warren and Chuck Schumer in the fall. The resolutions called on the next president to use executive power to cancel the student debt.

Expressing reluctance to use executive power to enact widespread student loan lending, Biden said in December, “I think that’s pretty questionable. IM not sure. I probably wouldn’t do that. “

By urging Congress to enact student loan waiver, Biden will leave it to lawmakers to determine what eligibility criteria, if any, will be attached to student debt waiver.

further reading

6 Student Loan Reforms Possible With a Democratic Senate

Biden may only assist $ 10,000 in student loan making

Biden Names Substitute For Betsy DeVos – Student Borrower Advocates Cautiously Optimistic

Final Stimulus Deal: What Student Borrowers Need To Know About End Of Relief

Ayanna Pressley: Biden should cancel student loan debt of $ 50,000 for each borrower

Could Biden Terminate Your Student Loans? It’s complicated

Could Biden cut some student debt through executive action?

What the election results mean for the student loan borrower

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