The Biden administration confirmed that student loan payments will restart in May, but members of Congress want a memo on student loan cancellation released now.
Here’s what you need to know.
Release the memo on student loans. That’s the message from more than 80 members of Congress, who sent a letter to Biden to encourage him to cancel up to $50,000 of student loan borrowers for student loan borrowers before student loan relief ends on May 1, 2022. In addition to wide-scale student loan cancellation, they want the president to release a memo that he asked the U.S. Department of Education to draft last year regarding the president’s legal authority to enact wide-scale student loan cancellation through executive action.
According to the letter, which Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) signed: “Publicly releasing the memo outlining your existing authority on cancelling student loan debt and broadly doing so is crucial to making a meaningful difference in the lives of current student loans, borrowers, and their families. It has been widely reported that the Department of Education has had this memo since April 5, 2021 after being directed to draft it.”
The intra-party fighting among progressive and moderate Democrats — particularly on the issue of wide-scale student loan forgiveness — may not bode well for Democrats in the upcoming elections in November. (Student loan forgiveness could be the reason Democrats lose the midterm elections).
Student loans: legal memo on student loan forgiveness
A Freedom of Information Act request revealed last year the existence of a heavily-redacted memo on the president’s legal authority to cancel student loans unilaterally. The seven-page memo is titled “The Secretary’s Legal Authority for Broad-Based Debt Cancellation,” is addressed to U.S. Secretary of Education Miguel Cardona, is written by the acting general counsel of the U.S. Department of Education, and is dated April 5, 2021. To date, this apparent memo, which White House Chief of Staff Ron Klain previously said Biden requested, hasn’t been released publicly.
The legal memo, if it’s completed, may address several issues, including:
the president’s legal authority to enact student loan cancellation by executive authority without further authorization from Congress;
recommendations on student loan forgiveness;
(Here’s who won’t get student loan forgiveness)
White House confirms student loan payments will restart on May 1
While the members of Congress warned that millions of student loan borrowers are unprepared to pay their student loans, the White House quickly responded that student loans payments are still scheduled to restart May 1, 2022. The White House also reiterated that Biden supports $10,000 of student loan forgiveness, a position he has supported since he was a presidential candidate. Biden is prepared to cancel up to $10,000 for millions of student loan borrowers, but Congress hasn’t passed any legislation. Once Congress passes student loan relief, Biden says he’s ready to signed the bill into law. While the president hasn’t committed to any wide-scale student loan cancellation, the White House has said the president continues to explore student loan debt relief through administrative channels.
“No one has been required to pay a single dime of Federal student loans since the President took office,” a White House spokesperson told The Hill today. (How federal student loans will change this year). “I’ll add that our country is seeing one of the strongest economic recoveries in history. And the pause announced in December gives some breathing room to borrowers who are still coping with the pandemic. The Education Department will continue working to ensure a smooth transition to repayment in May. The President supports Congress providing $10,000 in debt relief. And he continues to look into what debt relief actions can be taken administratively.”
Based on this latest update on student loans, it appears that federal student loan payments will restart May 1. Start preparing now. Explore all your options for student loan repayment so you’re not surprised when student loan relief ends.
Here are some popular ways to save money and pay off student loans faster: