President Joe Biden (Photo by Drew Angerer/Getty Images)
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Student loan forgiveness apparently is still alive.

Here’s what you need to know.

U.S. Secretary of Education Miguel Cardona confirmed yesterday that the possibility of wide-scale student loan forgiveness — the notion of student loan cancellation for most or all student loan borrowers — may be alive and well. After announcing major changes this month to public service student loan forgiveness, Cardona spoke publicly on the Biden’s administration’s next steps regarding student loan forgiveness. (Do you qualify for $4.5 billion of student loan forgiveness?).

In a town hall event Wednesday, Cardona said that “conversations are ongoing” regarding student loan forgiveness. “We’re going to continue conversations around loan forgiveness — broad loan forgiveness,” Cardona said, according to CNBC. “Our conversations are ongoing with the Department of Justice and the White House on those issues. We are also wanting to make sure that we’re doing not only the broad support for borrowers but also stopping the bleeding.”

Cardona added: “But we also have a Build Back Better Agenda that provides community college for all. If passed, and I’m really hopeful, we can correct some of the issues that have happened in the past, so that we don’t have people swimming in debt and we can stop the bleeding.”

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Cardona’s comments suggest several things. First, Cardona confirmed that the Justice and Education Departments are in discussions with the White House regarding next steps on any potential wide-scale student loan forgiveness. Second, Cardona implied that the Biden administration is focused on debt relief through other avenues. For example, in addition to $4.5 billion of student loan cancellation through public service loan forgiveness, the Biden administration has focused on targeted student loan cancellation and cancelled $11.5 billion of student loans. This includes major student loan relief such as $1.5 billion of student loan cancellation through the borrower defense to repayment rule and $5.8 billion of student loan cancellation through total and permanent disability. Third, it appears that the Biden administration not only wants to tackle student loan debt, but also provide student loan relief that attacks the underlying root cause of student loan debt. While wide-scale student loan cancellation would provide substantial student loan relief, any wide-scale student loan forgiveness would be a one-time event. This means that it wouldn’t address rising tuition costs or help student loan borrowers who borrow student loans tomorrow or the next day. This doesn’t mean there shouldn’t be student loan cancellation, but one-time student loan forgiveness doesn’t address the underlying issues in higher education that will continue after any wide-scale student loan forgiveness.

The Education Department is preparing a legal memo on the president’s ability to cancel student loan unilaterally without further congressional authorization. Progressive legislators such as Rep. Ilhan Omar (D-MN) and Rep. Alexandria Ocasio-Cortez (D-NY) have urged Cardona and President Joe Biden to release the memo by October 22, 2021. It’s been nearly six months since White House Chief of Staff Ron Klain said the president asked the Education Department to opine on wide-scale student loan forgiveness and his legal authority. These legislators, like Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) believe the president has existing authority to cancel student loans through an executive order with the “flick of a pen.” The Trump administration concluded that the president doesn’t have unilateral authority to enact wide-scale student loan forgiveness without further authorization from Congress. Speaker of the House Nancy Pelosi (D-NY) has agreed, noting that only Congress can pass wide-scale student loan forgiveness. While the Education Department could reach a different conclusion than the Trump administration, Biden will make the final decision regardless of the memo’s contents or recommendations. (Here’s how to get approved for student loan forgiveness).

Biden supports up to $10,000 of student loan forgiveness, but despite rhetoric from progressive members of Congress, has said repeatedly he doesn’t believe he has authority to cancel everyone’s student loans. If the Education Department reaches the same conclusion, Congress will be tasked with passing legislation to address student loans. This could take several forms of student loan relief. Biden said he is ready to sign any legislation on wide-scale student loan forgiveness. However, to date, Congress hasn’t passed any legislation on wide-scale student loan forgiveness. The U.S. Senate, which Democrats control, hasn’t held a vote on wide-scale student loan cancellation. Despite a Democrat-led majority, there isn’t sufficient support for wide-scale student loan forgiveness in Congress, even among Democrats. Therefore, as currently proposed — outright student loan cancellation up to $50,000 for federal student loan borrowers — any legislative effort to cancel student loans would fail in Congress. (These student loan borrowers wouldn’t even qualify for student loan cancellation). That’s not to say that Congress can’t find an alternative solution — such as student loan relief through bankruptcy, which has garnered some bipartisan support. However, wide-scale student loan cancellation in its current form would not pass a congressional vote in both houses.

Student loan relief is ending on January 31, 2022. Now is a smart time to evaluate all your options for student loan repayment. Here are some popular ways to save money with your student loans:

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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