Biden may cancel student loans after Justice Department review

0

President Joe Biden to ask US Department of Justice to review power to quash student loans.

Here’s what you need to know.

Student loans

As the first reported through Reuters, Biden to ask the Justice Department if it has any existing unilateral power to overturn student loan debt. If the Justice Department says it does not have the power to write off student loan debt through executive action (the most likely scenario), Biden would have independent confirmation of his current position. If the Justice Department finds he has existing authority (the least likely scenario), Biden could write off student loan debt through executive action. According to White House Press Secretary Jen Psaki:

  • Biden takes charge of $ 10,000 for student loan cancellations.
  • Biden does not support $ 50,000 of student loan cancellations for every student loan borrower.
  • Biden believes that any student loan cancellations over $ 10,000 should be by income and type of student loan debt.
  • Biden will ask the Justice Department to “conduct a legal review of his authority to act by executive action.”
  • The review will be conducted in conjunction with the White House Home Policy Council.
  • The Home Policy Council will review how any student loan cancellations would be targeted.

Biden said he would be cquestioning of the student loan by decree. However, he has said repeatedly that he does not believe he has the legal authority to write off student loan debt on a large scale, regardless of the amount. While the Justice Department may review Biden’s authority, if applicable, it can be assumed that Biden’s legal advisers likely conducted a similar review and concluded that Biden did not have such authority. If there’s a student loan cancellation, Congressional Democrats want limit student loan cancellation borrowers who earn less than $ 125,000 per year. The Trump administration has drafted a note that the president does not have the unilateral power to cancel a large-scale student loan.


Democrats plan to cancel $ 50,000 in student loans by executive order

In Congress, Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) are adamant that Biden has the existing unilateral power to cancel student loans. They say he doesn’t need further authorization from Congress and could sign an executive order today. What is their proof? According to Schumer and Warren, higher education in 1965 granted the US Secretary of Education the power to write off an unlimited amount of student debt. They refer to Section 432 (a) of the Higher Education Act, which grants the US Secretary of Education the power to “modify, compromise, waive or release any right, title, claim, lien or demand, however acquired, including any equity. or any right of redemption. Democrats plan to cancel $ 50,000 in student loans by executive order. They waged a public campaign against Biden, hoping to somehow force him to give in and write off the student loan debt. Representative Alexandria Ocasio-Cortez (D-NY) and other progressive Democrats have also joined the fight. If their public fight fails, Democrats in Congress have not formulated a clear plan to pass student loan cancellation in Congress. As of yet, it’s unclear whether Schumer and Warren can come up with a bipartisan plan.


How to pay off student loans faster

If you want pay off student loans faster, make sure you have a student loan game plan. This includes understanding all of your options for getting a lower interest rate, a lower monthly payment, and thinking about your student loan repayment plan. You can start with these three options, all free:


Related reading

Biden: I won’t cancel $ 50,000 in student loans

What the new stimulus package means for your student loans

Share.

About Author

Leave A Reply