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Will Biden Cancel Federal Student Loan Debt?

  • Biden-Harris Department of Education appointees currently analyzing possibility of eliminating federal student loan debt
  • NY Senator Schumer rallying troops to back a $50,000 federal loan forgiveness package

Federal student loan payments and interest charges have been on pause since March 2020 due to the pandemic; upon entering the White House at the beginning of this year, President Joe Biden exercised his executive order powers to extend the moratorium through September 2021.

Currently, the student debt loan freeze has relieved all borrowers of a collective $5 billion per month, which is set to surpass $90 billion in canceled student debt by the end of the freeze on September 30.

Biden’s Initial Bargain

During his presidential campaign, Biden proposed forgiving up to $10,000 in federal student loans for all borrowers, despite pleas from progressives asking for total forgiveness of America’s current $1.6 trillion in federal student debt.

Is Total Federal Loan Debt Forgiveness Possible?

More recently, Biden has shied away from the student loan conversation, allowing his newly appointed individuals to the Department of Education (DoE) to take the lead. Last month, members of the DoE announced that the agency would begin analyzing the practicality and weighing the costs of using the president’s executive action capabilities to cancel all student loan debt.

The newest member of the Biden-Harris DoE team, Toby Merrill, Deputy General Counsel, has made recent news for her progressive take on total loan debt cancellation.

The DoE’s negotiation process on loan forgiveness will be inherently slow and the agency likely won’t approach a conclusion prior to the September 30 moratorium expiration date.

Schumer’s Progressive Approach

Meanwhile, Senate Democrats have not yet joined Majority Leader Chuck Schumer (D-NY) in backing a current proposal to forgive $50,000 in federal student loan debt per borrower.

On July 1, however, Schumer and a group of Senators signed a letter to Education Secretary Miguel Cardona urging him to consider and prioritize changes that will “improve the overall confidence of borrowers in the federal student loan system.”

Do you have a plan to finance your student loans after September? Call our financial experts at 516-541-6549 and visit our website to get started.

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