2 ways to cancel your student loan

Path 1: Biden decides to cancel the student loan by his own order

When you tweet on Twitter or hear your friends say, “Biden might just cancel student loans,” they mean the first path to student loan cancellation. If Biden cancels student loans up to $ 50,000, 36 million people completely cancel student loans… However, not all so simple. Aside from the political debate about the merits of widespread student loan forgiveness, there are important legal considerations and rules that can determine whether your student loans will be canceled and by whom. In short, this path is a battle between Congress and the President. There is no debate along the way whether canceling the student loan is sound policy or will help millions of student loan borrowers. The parties already agree that abolishing the student loan is a good policy that will provide the necessary economic relief and save a generation from growing debt. Both Biden, Warren, and Schumer support the immediate cancellation of the student loan. However, the parties disagree on two main themes: first, how much student loan debt to cancel, and two, who cancels student loans…

To his credit, Biden has already taken steps to write off at least $ 2.3 billion in student loan debt since he became president. America has already reacted differently to Biden’s cancellation of student loans. For example, Biden canceled $ 1 billion student loans for 72,000 student loan borrowers. He also canceled another $ 1.3 billion in student loans for 41,000 borrowers with full and permanent disabilities. However, Warren and Schumer want Biden, not Congress, to promptly cancel student loans of up to $ 50,000 through a decree. Citing the Higher Education Act of 1965, they say the president has full legal authority to revoke student loans with the flick of a pen. Biden disagrees and says he doesn’t think he has the unilateral authority to revoke student loans based on the executive order. To “settle” this dispute, Biden asked the US Department of Education for its views on Biden’s legal authority to annul student loans through a decree. However, there is one major problem.…

It is important to note that Biden wants to cancel student loans in three ways… So, if large-scale student loan cancellation does not happen, there are still other ways Biden can help more student loan borrowers cancel their student loans.

Bottom line: It’s too early to say what the Department of Education will conclude and whether Biden will accept the recommendation. However, if Biden continues to cancel student loans, expect legal problems that could delay implementation of the student loan cancellation.

Path # 2: Congress Legally Cancels Student Loans

Warren and Schumer don’t want to mention it, but the likelihood that Congress will decide to abolish the student loan is slim.… It may come as a surprise, but there doesn’t seem to be enough votes to pass a large-scale student loan forgiveness. There are at least 16 US Senators, including Warren and Sumer, who wants to cancel a student loan up to $ 50,000… These 16 senators have signed resolution this encourages Biden to decide to cancel the student loan. Warren, who advocated mass student loan forgiveness, held explosive Congressional hearings student loans and student loan cancellations… During the hearing Warren not only renewed its call to cancel student loansbut also said that Navient – one of the nation’s largest student loan service centers – should be fired from serving federal student loans, and Navient CEO Jack Remondi should also be fired. Despite this hearing, it is unclear whether moderate senators will join her movement. So far, Republicans have not supported student loan abolition, and several moderate Democrats have shown their support for any student loan abolition, let alone $ 50,000. This is problematic because Democrats need all 50 Democrats to support the abolition of the student loan for the law to become law.

Bottom line: Congress would be the logical arm of government to abolish student loans. However, it does not appear to have gathered enough votes to pass any law on large-scale student loan forgiveness. This puts Democrats in a quandary because there is a better hope of forgiving student loans under the executive order. However, this is far from guaranteed.

Student Loan Cancellation: Next Steps

Will you receive a student loan cancellation? Ideally, Warren and Schumer would like Congress to abolish student loans. Why? They can draft legislation on their own terms, including who is eligible for student loan forgiveness and how much will be canceled. Biden has already indicated that he will sign any student loan forgiveness law that Congress sends him, including student loan cancellation up to $ 50,000. That in itself is positive for Democrats in Congress. However, Biden also knows that Congress is unlikely to pass such a law. This is why Warren and Sumer force Biden to act unilaterally, but this can be an uphill battle. First, Biden does not support the cancellation of a student loan of any amount by an executive order. Biden could change his mind after student loan cancellation legal due diligencebut it was clear to him where he was. Second, it is difficult to argue – despite a literal reading of the Higher Education Act cited by proponents of student loan abolition – that Congress has given the executive branch unlimited powers to cancel student loan debt for every student loan borrower. It is rare for Congress to completely relinquish its powers and simply hand them over to the executive branch. Second, if Biden decides to cancel student loans, remember that he will decide amount and conditions of student loan cancellation… This means that Biden, not Congress, can decide who is eligible for student loan cancellation and how much student loan debt will be canceled. Ideally, Schumer and Warren would like Congress to monitor the terms of student loan cancellation. However, it now looks like their best hope is that Biden will agree to the forgiveness of student loans, but it will be on his terms, not their terms.

When evaluating your student loan repayment options, be sure to consider the following options:

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