This story is developing.

President Joe Biden released his new annual budget today.

Here’s what you need to know — and what it means for your student loans.

Biden released a $6 trillion budget proposal today for fiscal year 2022. There are several important implications for student loans, including, but not limited to:

As expected, Biden did not include any student loan cancellation in his new budget. This is another major setback for student loan cancellation, as Biden has not included any student loan cancellation in the latest stimulus packages or infrastructure package. Why was student loan cancellation excluded? One possible reason is that the annual budget only contains major policy plans that have already been released by the Biden administration. Biden hasn’t officially stated that he won’t enact student loan cancellation, but it’s become increasinly clear that the potential for unilateral, wide-scale student loan cancellation from the president is unlikely. That said, Biden is awaiting a legal analysis from the U.S. Department of Education to determine if the president has the legal authority to enact student loan cancellation without further authorization from Congress. Therefore, it’s possible that Biden decided not to include student loan cancellation in his budget because the Education Department hasn’t released it findings.


Biden’s budget would increase the maximum Pell Grant by $400, which is in addition to the $1,475 increase in Pell Grants in the American Families Plan. The goal of increasing Pell Grants is to make college more affordable, and lower the amount of student loans that a borrower would need to borrow. This represents the largest one-time increase since 2009, and is part of the president’s plan to double the size of Pell Grants. Pell Grants are especially helpful for low-income students to fund higher education. An increase in Pell Grants means that student loan borrowers who qualify would need to borrower fewer student loans, which could save these student loan borrowers money. Separately, Sen. Bernie Sanders has called for the largest student loan cancellation and free college plan in history. Like Biden, Sanders want to make four-year public colleges and universities as well as community colleges tuition-free. Another possibility to reduce student loan debt is for colleges and universities to consider making college three years long, instead of four years.

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Biden is particularly focused on increasing equity in higher education. His budget would increase funding for science and engineering programs that increase participation for underrepresented groups. The funding would help support “curriculum design, research on successful recruitment and retention methods, development of outreach or mentorship programs, fellowships, and building science, engineering research, and education capacity” at Historically Black Colleges and Universities (HBCUs) and other Minority-Serving Institutions (MSIs). Sanders, Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) have all said that one effective way to increase equity in higher education is to cancel student loan debt.


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