Republicans slam President Joe Biden on student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
Republicans aren’t too happy with Biden’s latest actions to cancel student loans. For example:
- Biden canceled $5.8 billion of student loans earlier this week;
- He has now canceled $25 billion of student loans for 1.3 million student loan borrowers; and
- This includes student loan forgiveness through borrower defense to repayment ($7.9 billion), public service loan forgiveness ($7.3 billion) and total and permanent disability ($8.5 billion).
Multiple Republicans have criticized Biden’s unilateral actions in recent weeks. Specifically, they have objected to the over-reach of executive power, the significant cost to the American people, and the failure to address the underlying problems of higher education such as rising tuition.
Student loan forgiveness: Republicans criticize Biden
Republicans in Congress have criticized Biden in multiple ways regarding his actions on student loan forgiveness. For example, legislators such as Sen. Mitt Romney (R-UT), Sen. Tom Cotton (R-AR) and Rep. Virginia Foxx (R-NC) have said:
- student loan cancellation encourages students to borrow more student loan debt;
- student loan forgiveness will lead colleges and universities to increase tuition;
- Biden is granting student loan forgiveness in exchange for votes in the midterm election;
- the American people, especially those who didn’t go to college, will pay the cost of student loan cancellation for the select few who were fortunate enough to attend college; and
- canceling student loans will increase inflation.
“Expansive student loan forgiveness does nothing to solve the problems in higher education and exacerbates the economic disaster fueled by the President’s lack of fiscal responsibility,” Foxx said. “Time and again, President Biden operates as if he can issue any decree he wants on student loan forgiveness, even if it means exercising authority that he does not have.”
Student loan cancellation: Biden’s next steps
What are Biden’s next steps on student loan forgiveness? For now, Republicans can’t stop Biden from announcing wide-scale student loan forgiveness. Multiple Republican senators have proposed legislation to prevent Biden from enacting wide-scale student loan forgiveness. As president, Biden has the right to announce a new policy to cancel student loans for millions of student loan borrowers. That said, this doesn’t mean Biden has the legal authority to enact wide-scale student loan cancellation. Republicans in Congress — as well as Speaker of the House Nancy Pelosi (D-CA) — have argued that only Congress has the legal power to enact wide-scale student loan cancellation. However, Sen. Elizabeth Warren (D-MA) argues that Biden has existing legal authority under the Higher Education Act to cancel an unlimited amount of student loans for all student loan borrowers.
Student loan cancellation: Biden could reconsider $50,000 of student loan relief
Warren and other advocates want Biden to cancel up to $50,000 of student loans. Previously, Biden said he’s not considering $50,000 of student loan cancellation. However, there are several reasons why Biden could reconsider canceling $50,000 of student debt. Warren and Senate Majority Leader Chuck Schumer (D-NY) say student loan forgiveness will stimulate the economy, won’t increase inflation, will decrease disparities, and help student loan borrowers have more money to get married, start a family buy a home and save for retirement. Even if Biden proceeds with student loan cancellation, Republicans and other opponents of broad student loan relief could launch legal challenges, which could delay any implementation. Temporary student loan relief from the Covid-19 pandemic ends on August 31, 2022. Are you prepared to restart student loan payments? Here are some helpful strategies to pay off student loans faster:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)