President Joe Biden (Photo by SAUL LOEB/AFP via Getty Images)
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Here are 5 reasons why Congress hasn’t enacted student loan cancellation.

Here’s what you need to know.

As student loan borrowers wonder if they will get student loan forgiveness, one question comes to mind: Why hasn’t Congress cancelled student loans? Congress has the legal and legislative power to enact wide-scale student loan cancellation. However, to date, Congress hasn’t acted. Here are 5 reasons why Congress hasn’t enacted student loan cancellation:

Progressive Democrats in Congress want President Joe Biden to enact wide-scale student loan cancellation up to $50,000 for student loan borrowers. Even though Congress could pass legislation to cancel student loans, some members of Congress have pinned their hopes on the president issuing an executive order that could completely wipe out federal student loan debt for 36 million Americans. Based on the leading proposal from Sen. Elizabeth Warren (D-MA) and Sen. Chuck Schumer (D-NY), student loan borrowers who earn up to $125,000 annually would be eligible for wide-scale student loan cancellation of their federal student loans. Warren and Schumer say that Biden has legal authority from Congress to cancel an unlimited amount of student loan debt for an unlimited amount of student loan borrowers because Congress granted such authority in the Higher Education Act of 1965. Biden, however, doesn’t necessarily agree with that position. Biden has said he doesn’t believe he has any legal authority to enact wide-scale student loan cancellation. As such, in March, Biden has asked the U.S. Department of Education to provide him with a legal memo regarding his executive powers and student loan cancellation. To date, that legal memo hasn’t been made public.

For all the rhetoric around student loan forgiveness, Congress hasn’t made wide-scale student loan cancellation a legislative priority. Yes, there have been multiple proposals for student loan forgiveness. Sen. Bernie Sanders (I-VT) wants to cancel all $1.7 trillion of student loan debt, while other members of Congress have proposed $10,000, $25,000 and $50,000 of student loan cancellation. Proposals are one thing; legislative action is another. Simply put, Congress hasn’t voted on any of these major proposals. (Here’s where Democrats stand on student loan forgiveness). This includes the main proposal for student loan forgiveness from Warren and Schumer, the latter of whom is the Senate Majority Leader and effectively controls what Congress can legislation comes to the Senate floor for a vote. Congress has multiple opportunities to include wide-scale student loan forgiveness in both standalone legislation and part of larger legislative packages. However, Congress has repeatedly not included wide-scale student loan forgiveness in recent stimulus packages, budget packages or the infrastructure package.

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Since becoming president, Biden has cancelled nearly $10 billion of student loans. Biden has now cancelled more student loan debt than any other president. This includes:

$5.8 billion of student loans for student loan borrowers with a total and permanent disability;
$1.3 billion in student loan cancellation for 41,000 student loan borrowers in March;
more than $1.5 billion in student loans through the borrower defense to repayment process for nearly 92,000 student loan borrowers; and
another $1.1 billion in student loans cancelled through borrower defense to repayment.

(Find out here if you qualify for $8.7 billion of Biden student loan forgiveness).

Here are 5 reasons why Biden hasn’t enacted wide-scale student loan cancellation. Although public rhetoric doesn’t necessarily match this sentiment, Democrats in Congress may defer to Biden to focus on targeted student loan cancellation rather than wide-scale student loan cancellation. Why? Biden will continue to deliver student loan forgiveness to student loan borrowers based on existing law. Here’s what Biden student loan forgiveness means for your student loans.

Another reason that Congress hasn’t cancelled student loans is that Congress doesn’t have the votes to pass wide-scale student loan cancellation. That’s a surprise to many people, but if Congress held a vote today on wide-scale student loan cancellation, the legislation wouldn’t pass. That includes any wide-scale student loan forgiveness of any amount, including $10,000 of student loan forgiveness or $50,000 of student loan cancellation. While progressives support wide-scale student loan forgiveness, many moderate and conservative Democrats do not. The reality is that wide-scale student loan forgiveness — despite its financial advantages to student loan borrowers — is not a popular policy position on Capitol Hill with Republicans and many Democrats. (That said, here’s how to get student loan forgiveness).

Democrats control both houses of Congress and want to hold on to legislative power. The next congressional election is in November 2022, and the U.S. Senate is split 50-50. Therefore, Democrats may tread lightly on certain policy positions such as wide-scale student loan cancellation that could impact members of Congress in tough re-election races. Student loan cancellation is popular among progressives, but less so among moderate and independent voters. Concerns about the mid-term elections could be another reason why Congress hasn’t enacted wide-scale student loan cancellation. It’s possible that Congress waits until after the midterm election — for the second half of Biden’s first term — but there is no indication that Congress would change its support for wide-scale student loan cancellation. Instead, Congress could pass other changes to help borrowers with student loans such as simplifying income-driven repayment, improving public service loan forgiveness, and making bankruptcy more accessible for student loans.

With student loan relief expiring soon, make sure you focus on student loan repayment now. Understand all your options for your student loans before your student loan payments restart. Here are some popular options to save money:

Student loan refinancing (get a lower interest rate + lower monthly payment)
Income-driven repayment plans (get a lower monthly payment)
Public service loan forgiveness (get student loan forgiveness)

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