What’s next for student loan forgiveness? Here are 3 options.
Here’s what you need to know.
What happens next with student loan cancellation is top of mind for student loan borrowers, legislators and student loan watchers alike. In the last month alone, the latest student loan updates have included:
With all this uncertainty, on thing is clear: everyone wants to know how to get student loan forgiveness. Here are 3 options for what happens next with wide-scale student loan forgiveness:
1. Student loan forgiveness: the status quo
The first option for wide-scale student loan forgiveness is the status quo: President Joe Biden doesn’t cancel everyone’s student loan debt. Schumer has made clear that partisanship is a major roadblock in Congress to pass legislation on student loan cancellation. Plus, many Democrats don’t support wide-scale student loan cancellation as Schumer and Sen. Elizabeth Warren (D-MA) have proposed. (Here’s how to get student loan forgiveness). Biden has consistently chosen not to enact wide-scale student loan cancellation through an executive order. He has said he doesn’t believe he has the legal authority to do so, and has called on Congress repeatedly to cancel up to $10,000 of student loans for student loan borrowers. Student loan relief — namely temporary student loan forbearance from the Cares Act — is ending January 31, 2022. While there is some hope for mass student loan cancellation before then, there has been no outward indication from the Biden administration that any wide-scale student loan cancellation is imminent. (Student loan forgiveness has one major problem). The Biden administration also confirmed that there won’t be any further extension of student loan relief. This means regular student loan payments for federal student loans will resume starting February 1, 2022.
2. Biden cancels everyone’s student loan debt
The second option is that Biden cancels everyone’s student loan debt. This is a lower probability option, but Biden could decide to cancel student loan debt for all or most student loan borrowers. (How to get student loan forgiveness if you don’t work in public service). Why? Biden could decide it’s the right decision to help student loan borrowers get out of debt and address outstanding disparities. Other reasons to cancel student loan debt include stimulating the economy, and helping borrowers to have enough financial resources to get married, start a family and save for retirement. Biden potentially could change course, particularly as progressives in Congress openly pressure Biden to cancel student loans. The release of a student loan memo from the U.S. Department of Education conceivably may support the president’s ability to cancel student loans without further authorization from Congress. However, this doesn’t mean Biden will follow the non-binding legal opinion. This option is low likelihood, but still a possibility. (Here’s who qualifies for student loan forgiveness right now).
3. Biden cancels more student loans
The third option, which is likely, is that Biden continues to cancel student loan debt. The Biden administration is clearly focused on helping student loan borrowers. Biden has cancelled $11.5 billion of student loans this year, and there is no indication that he will stop. The Education Department has revamped student loan forgiveness so that more public servants can get their student loans cancelled. Income-driven repayment plans are expected to be simplified, which can bring more student loan relief. While this targeted student loan cancellation may not mean wide-scale student loan cancellation, more student loan borrowers, including you, may have access to financial freedom.
Student loan forgiveness may be your focus. That said, with student loan relief ending, make sure you understand all your options for student loan repayment. Here are some popular ways to pay off student loans: