Is This A Game Changer For Student Loan Cancellation?

President Joe Biden (Photo by Chip Somodevilla / Getty Images)

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Is this a game changer for student loan termination?

Here’s what you need to know.

Student Loans

The hiring of a new Assistant General Counsel at the Department of Education who co-authored a letter to Senator Elizabeth Warren (D-MA) in support of a comprehensive cancellation of student loans should not be interpreted to mean that the Biden administration is now “automatically” is enacted ”widespread student loan forgiveness. It would be premature to conclude that hiring a single person would result in automatic student loan cancellation as that person supports the president’s unilateral authority to cancel student loans. Let’s break it down.

1. Is this positive for student loan borrowers?

Yes. The hiring of this experienced attorney is positive for student loan borrowers. The attorney has fought for consumer protection, helped ensure student loan cancellation for student loan borrowers, held predatory schools accountable, and helped create greater transparency on student loans, including through working with the Project on Predatory Student Lending the Harvard Law School. This strong background will intensify efforts by the US Department of Education in these and other areas to help more student loan borrowers.

2. Is the time to cancel the student loan helpful?

The Department of Education is currently reviewing President Joe Biden’s legal authority as President to cancel student loans. The Ministry of Education analyzes, among other things:

Here are 5 possible changes that could result from this student loan legal review and student loan issuance. Bringing in an attorney who will assist in large-scale student loan termination comes at a helpful time for student loan borrowers. As the Department of Education reviews the President’s legal powers to terminate student loans, the attorney can help influence the Department of Education’s legal analysis on student loan waiver and other types of student loan relief.

3. Are your student loans canceled?

You may be wondering, “Has the student loan termination been canceled?” There is no guarantee that your student loan will be canceled if the Department of Education hires student loan termination supporters. Legally speaking, it’s an uphill battle to say the president can unilaterally cancel everyone’s student loans. Could Your Student Loans Be Canceled? Yes. Is it guaranteed? No. A new employee can influence the political and legal analysis as well as the rule-making that emerges from the hearings on student loans. However, the letter from the attorney, which concluded that the president had unilateral authority to cancel student loans of any size, has been in the public domain for 18 months. There is no new information that the Biden administration was unaware of 18 months ago when Warren shared the contents of the letter terminating the student loan. Warren argues that Section 432 (A) of the Higher Education Act of 1965 endorses the authority of the President, citing the authority of the Department of Education, “all right, title, title, lien, or including any right of participation or redemption.” Senate Majority Leader Chuck Schumer (D-NY) says Biden can “swipe” an ordinance off an unlimited amount of federal student loan debt with one stroke of the pen. However, their bill would limit student loan issuance to up to $ 50,000 for federal borrowers with annual incomes of up to $ 125,000.

4. Who cancels student loans?

There are two main ways to cancel the student loan. Either the President or Congress could cut student loans. (In the event of bankruptcy, for example, the judiciary can also cancel the student loan). For example, since taking office as president, Biden has canceled $ 3 billion in student loans. The question is not whether Biden can enforce targeted student loan cancellation, but rather whether he can enforce comprehensive student loan cancellation for an unlimited number of student loan borrowers and unlimited student loan debt cancellation. Biden has announced that it will cancel student loans in three ways. Biden supports student loan cancellation of up to $ 10,000 for student loan borrowers, but like most legal scholars, has publicly questioned the notion that a president is unilaterally empowered to cancel student loans without further express permission from Congress. Biden is waiting for the legal recommendation from the Ministry of Education, although this legal analysis is a non-binding opinion. (For example, the Trump administration suggested that the president cannot unilaterally cancel student loans without approval from Congress). Ultimately, Biden could follow the Education Department’s recommendations or make an alternative decision. While there are several student loan approval proposals in Congress, there aren’t enough votes to pass a comprehensive student loan termination bill. This includes canceling the student loan for $ 50,000, $ 10,000, or any other amount.

Termination of the student loan: final thoughts

As the Department of Education builds its team, expect the Department of Education to help more student loan borrowers cancel student loans, hold student loan service providers and for-profit schools accountable, create more transparency, reduce bureaucracy, simplify student loan repayments, and create an environment create in which student loan borrowers have a powerful voice as they move into the higher education sector. This can also mean a far-reaching student loan termination, but it is not guaranteed based on the hiring alone.

Also, if there is a major student loan cancellation, it is possible that you will not qualify or that the student loan cancellation amount does not cover your entire student loan balance. So make sure you have a student loan game plan regarding student loan repayment. Here are some popular options:

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