Student Loan Relief Program Update 2021

It seems that student loan relief is still alive and well.

Here’s what you should know.

Student Loans Update

On October 13, 2021, U.S. Secretary of Education Miguel Cardona stated that the prospect of large-scale student loan relief – the concept of student loan cancellation for most or all student loan borrowers — may be alive and thriving. Cardona talked publicly on the Biden administration’s future moves on student loan relief after unveiling significant reforms to public service student loan relief earlier this month. (Are you eligible for $4.5 billion in student loan relief?)

Student loan relief: cancel student loans

Cardona said Wednesday at a town hall session that “conversations” about student loan relief are “ongoing.” “We’re going to continue discussions about wide student loan relief,” Cardona told CNBC. “Our discussions with the Department of Justice and the White House on those matters continue. We also want to ensure that we are providing comprehensive assistance for borrowers while also halting the bleeding.”

“However, we also have a Build Back Better Agenda that ensures access to community college for everyone,” Cardona said. If approved, and I’m very optimistic, we’ll be able to address some of the problems that have arisen in the past, preventing individuals from drowning in debt and putting an end to the bleeding.”

What this implies for student loans and student loan relief termination

Cardona’s remarks imply a number of conclusions. To begin, Cardona acknowledged that the Justice and Education Departments are in talks with the White House about the next stages in any possible broad-scale student loan relief program. Second, Cardona indicated that the Biden administration is focused on resolving debt in non-traditional ways. For instance, in addition to canceling $4.5 billion in student debts via public service loan relief, the Biden administration concentrated on targeted student loan cancellation, canceling $11.5 billion in student loans. This contains significant student debt relief, including the cancellation of $1.5 billion in student loans under the borrower defense to repayment rule and the cancellation of $5.8 billion in student loans under the complete and permanent disability rule. Third, it seems as if the Biden administration is committed to not just addressing student loan debt, but also to providing student loan relief that addresses the fundamental source of student loan debt. While widespread student debt cancellation would offer significant student loan relief, such a move would be one-time. This implies that it would do little to alleviate increasing tuition prices or to assist borrowers of student loans who take out loans tomorrow or the following day. This is not to say that student loans should not be cancelled, but one-time debt cancellation does not solve the fundamental problems in higher education that will persist even after widespread loan cancellation.

Where has the memo about the cancellation of student loans gone?

The Education Department is drafting a legal document outlining the president’s authority to unilaterally cancel student loans without additional legislative permission. Progressive lawmakers such as Representative Ilhan Omar (D-MN) and Representative Alexandria Ocasio-Cortez (D-NY) have pushed Cardona and Vice President Joe Biden to disclose the document before October 22, 2021. It’s been almost six months since White House Chief of Staff Ron Klain said that the president requested an opinion from the Education Department on broad student loan relief and his legal authority. These lawmakers, including Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY), think the president already has the power to cancel student loans with the “flick of a pen” via executive order. According to the Trump administration, the president lacks the unilateral power to implement broad student loan relief without congressional permission. Nancy Pelosi (D-NY), Speaker of the House, concurred, emphasizing that only Congress has the authority to enact broad student loan relief. While the Education Department’s judgment may vary from the Trump administration’s, Biden will make the ultimate call regardless of the memo’s substance or suggestions. (Learn how to get approved for student loan relief here.)

Student loans: what’s next?

Biden favors student loan relief up to $10,000, but despite progressive members of Congress’ rhetoric, he has said repeatedly that he does not think he has the power to cancel everyone’s student loans. If the Education Department comes to the same conclusion, Congress will be charged with enacting legislation addressing student loan debt. This may include a variety of different types of student debt relief. Biden said that he is prepared to approve any measure that provides for widespread student debt relief. However, Congress has yet to approve legislation for widespread student loan relief. The United States Senate, which is controlled by Democrats, has not had a vote on widespread student debt cancellation. Despite a Democratic majority in Congress, there is not enough support for widespread student loan relief, even among Democrats. As a result, any legislative attempt to cancel student loans would fail in Congress under the present proposal – unilateral cancellation of up to $50,000 in federal student loan debt for borrowers. (These debtors would be ineligible for student loan cancellation). That is not to suggest Congress cannot discover a workable alternative — such as student loan relief via bankruptcy, which has gained bipartisan support. However, widespread student debt cancellation in its present form would fail to pass both chambers of Congress.

Student loan relief is set to expire on January 31, 2022. Now is an excellent time to consider all of your student loan repayment alternatives. Several common methods for saving money on student loans include the following:

If you need any help with your credit or financing please contact us now for a free consultation from a reputable credit repair company. We also have other tips like how to rent apartments that accept evictions and what is shoulder surfing?

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Amber Watson