Biden 'has not ruled out' student loan forgiveness, White House says
Here's what the president has done so far to address the student debt crisis
President Joe Biden campaigned on canceling $10,000 worth of student loan debt per borrower as a presidential candidate, but his administration has been unable to deliver widespread student loan forgiveness more than a year into his term. Still, Biden "has not ruled out" student debt cancellation, White House Press Secretary Jen Psaki said at a press briefing last week.
"And I would note that, again, he would encourage Congress to send him a bill canceling $10,000 in student debt, something that he talked about looking forward to signing on the campaign trail," Psaki added.
Keep reading for a full timeline of Biden's progress on student debt cancellation, from his remarks as a presidential candidate to present day. And if you're looking for ways to manage your student loan debt, one strategy is to refinance to a private loan at a lower interest rate. You can visit Credible to compare student loan refinance rates for free without impacting your credit score.
A GUIDE TO STUDENT LOAN FORGIVENESS PROGRAMS
Biden again punts student loan forgiveness to Congress
This isn't the first time the press secretary has indicated that the president wants Congressional Democrats to pass student debt forgiveness legislation. Psaki said at a Dec. 14 press briefing that Biden is "happy to sign" a bill from Congress.
But it would be difficult for Congress to pass legislation aimed at canceling student loans, since Democrats only hold a razor-thin majority in the House and Senate. A student debt forgiveness bill would need the support of every moderate Democratic senator in order to pass — and Congress has been unable to squeeze through other parts of Biden's agenda, including the Build Back Better Act.
Meanwhile, progressive Democrats have been calling on the president to forgive student loans via executive action, arguing that Education Secretary Miguel Cardona has the legal authority to discharge federal student debt. However, some lawmakers don't believe that Biden has the power to cancel student loans, including House Speaker Nancy Pelosi.
Even if the president is able to enact broad student loan forgiveness, not all borrowers will be eligible. About 2.4 million private student loan borrowers wouldn't benefit if Biden cancels federal student debt. If you're among the many Americans with private student debt, you might consider refinancing to lower your monthly payment or pay off debt faster. You can learn more about student loan refinancing by visiting Credible.
WHAT TO KNOW ABOUT THE TEACHER LOAN FORGIVENESS PROGRAM
A timeline of Biden's student loan forgiveness policy
During his presidency, Biden has overseen a number of administrative changes that resulted in over $17 billion worth of student loan forgiveness for borrowers who qualified for certain programs, the Department of Education reports. But he hasn't yet been able to deliver the widespread debt cancellation he once campaigned on. Here's a full timeline of the Biden administration's student loan relief measures:
- March 22, 2020: While campaigning for president, Biden advocated for forgiving "a minimum of" $10,000 worth of student loan debt per borrower on Twitter. Then in November 2020, he said as president-elect that student loan forgiveness "should be done immediately."
- Jan. 20, 2021: On Biden's first day in office, he extended the federal student loan payment pause through September 2021. He has issued three more forbearance extensions since then, with the most recent moratorium set to expire September 2022.
- May 28, 2021: Biden announced his 2022 federal budget proposal, which didn't include funding for student loan forgiveness. The president's proposed 2023 budget also excludes debt cancellation.
- June 16, 2021: The Education Department approved 18,000 borrower defense claims for former ITT Tech students, canceling $500 million in student debt. A series of approvals have since been granted, bringing the total amount of borrower defense discharges to $2 billion since Biden took office.
- Aug. 19, 2021: As part of regulatory changes enacted by the Biden administration, more than 323,000 borrowers with a total and permanent disability (TPD) became eligible for $5.8 billion worth of student loan discharges. That number has since increased to over $7 billion for 400,000 borrowers.
- Aug. 26, 2021: The Education Department announced $1.1 billion in debt forgiveness for an additional 115,000 borrowers who attended ITT Technical Institute through the closed school discharge program.
- Oct. 6, 2021: The Biden administration made changes to the Public Service Loan Forgiveness program (PSLF), bringing 550,000 borrowers closer to achieving a loan discharge. Since then, more than 100,000 borrowers have become eligible for $6.4 billion worth of relief under the limited PSLF waiver.
- Dec. 8, 2021: Prominent progressive Democrats, including Senate Majority Leader Chuck Schumer, Sen. Elizabeth Warren and Rep. Ayanna Pressley urged Biden in a letter to forgive up to $50,000 worth of student loan debt per borrower. In January, more than 80 Democratic lawmakers joined the cause.
- March 3, 2022: White House Chief of Staff Ron Klain said on a podcast episode that the president was considering "executive action debt forgiveness" when federal student loan payments resume.
- April 6, 2022: As part of Biden's most recent forbearance extension, student loan borrowers in delinquency and default will be able to restart payments in good standing. The president didn't mention canceling student loans during his announcement, although Psaki later said that he hasn't "ruled out" the possibility of broad debt forgiveness.
STUDENT LOAN BORROWERS IN DEFAULT WILL RECEIVE 'FRESH START' WHEN FORBEARANCE ENDS
Because the future of student debt relief remains unclear, some borrowers may be looking for alternative ways to pay off their loans. It may be possible for student loan borrowers to lock in more favorable terms through an income-driven repayment plan (IDR) or by refinancing to a private student loan.
Keep in mind that refinancing your federal loans through a private lender would make you ineligible for income-driven repayment plans, COVID-19 administrative forbearance and federal student loan forgiveness in the future. But if you don't plan on utilizing these programs, then refinancing may be worthwhile.
You can compare current student loan refinance rates in the table below. Then, you can use Credible's student loan calculator to determine if refinancing is the right strategy for your financial situation.
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