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Joe Biden, the Vice President of the United States (AFP photo by Eric BARADAT) (Photo courtesy of ERIC BARADAT/AFP/Getty Images)
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These five things must happen before President Joe Biden signs legislation canceling student loans.
Here’s everything you need to know about it.
Every day, some senator, advocate, or student loan borrower seems to be pleading with Biden to forgive student loan debt. When he ran for president, he allegedly promised to abolish student loans. Others claim he stated that he will cancel student loans on the first day. Others argue that he hasn’t forgiven enough student loan debt. In actuality, since taking office, Biden has cancelled $3 billion in student debt. The sum is described as significant. It’s been dubbed unimportant. Most student loan borrowers, on the other hand, are focused on the possibility of a bigger prize: student loan cancellation on a broad scale. Many people don’t understand why it’s taking so long, why it hasn’t happened yet, or when their student loans will be forgiven. Here’s the thing: there’s a method to everything. Congress has not revoked student loans because there isn’t enough bipartisan support in Congress to do so, whether the loans are for $10,000 or $50,000. Is Biden going to forgive student loan debt? Five things must occur in order for this to occur:
Despite what you may have heard on social media or read online, there is no evidence that Biden has the legal ability to cancel student loans unilaterally without congressional approval. Many politicians, including lawyers, have expressed their thoughts on the subject. Most legal scholars, however, do not agree that a president may eliminate all student loan debt for all borrowers. Yes, Biden has used an executive order to implement targeted student loan cancellations, which he has the ability to do. He has not, however, enforced large-scale student loan cancellation because he believes he lacks the legal right to do so. As a result, Biden has requested recommendations from the US Department of Education on his legal ability to eliminate student loan debt. That investigation has been underway for at least four months, and the Education Department might report its findings to the president at any time. However, a legal examination is insufficient to convince Biden to cancel student loans on a large scale.

The phrase “the president has legal authority” is insufficient. More importantly, the legal authority to cancel student loans must be straightforward and clear. Why? If Biden goes ahead and cancels student loans based on an uncertain interpretation of an existing statute or legislation, a slew of challenges could arise, perhaps delaying the cancellation of student loans on a large scale. Supporters of student loan cancellation point to Section 432(A) of the Higher Education Act of 1965, which states that the Department of Education has the authority “to modify, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or right of redemption.” While this phrasing may lead one to believe that the Education Department has unrestricted unilateral authority, there are several reasons why your student loans cannot be lawfully terminated on this basis. Section 432(A) of the Higher Education Act of 1965 is at the very least vague. For example, the statute does not indicate that the Education Department has the authority to erase every student loan borrower’s debt. If Congress actually meant to confer such authority, it would have said so openly in clear terms. That said, it’s improbable that Congress, which has the power of the purse under the U.S. Constitution, gave the executive branch complete and absolute authority to cancel student loans without restriction — more than $1 trillion in federal student loan debt in today’s currency. Perhaps the Education Department will reach a different decision, but the conclusion should be clear so that the president can act confidently.
ADDITIONAL INFORMATION FOR YOU

If the Education Department advises that the president proceed with a large-scale student loan cancellation, the Education Department should make it clear whether there are any restrictions. Is it possible for the president to cancel every student loan borrower’s debt? Is it only for particular types of student loan borrowers? Is it restricted by the type of student loan? Is there a cap on the overall amount of money I can spend? The most popular proposal in Congress would limit student loan forgiveness to up to $50,000 per borrower, apply only to federal student loans, and apply only to those earning up to $125,000 per year. If the Education Department believes that such executive power exists, the president should be aware of the boundaries of that power.

To be clear, the Education Department is presenting the president with a recommendation. For example, this is a non-binding legal opinion that is not regarded as a judicial judgement. The Trump administration has weighed in on the subject, concluding that a president does not have unilateral legal authority to cancel student loans on a large scale. The potential legal objections to student loan cancellation should be made apparent if the Education Department concludes that the president has clear power to cancel student loans. If the president decides to cancel student debts, for example, legal challenges are likely. In practice, this could cause a significant delay in the implementation of student loan cancellation on a large scale. What are the chances of such legal snafus? What does this entail in practice for borrowers of student loans? How long could the cancellation of student loans be postponed? Is there a way to avoid such legal wranglings? These and other issues should be resolved so that the president can consider all options.

Only the president will make the final decision, regardless of what the Education Department recommends or whether the president has legal authority. The president has the option of following the Education Department’s proposal or opting for a different path. As a result, the fifth condition must be met: Biden must decide to cancel all student loans on a large scale. Biden has emphasized numerous times that Congress is the proper federal branch to cancel student debts, and he has declared that he would sign any bill sent to him by Congress regarding student loan cancellation. So, part one is the legal memo, while part two is Biden’s next move.
Make sure you have a strategy in place for paying off your student loans. Even if a student loan is cancelled, you may not be eligible, and the amount of the cancellation may not be sufficient to cover your whole student loan obligation. Here are a few popular alternatives:

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