This week, the Biden administration announced new student loan relief, including an extension of the ongoing student loan payment pause, as well as an initiative to automatically cure certain defaulted student loans.
Conspicuously absent from Biden’s announcement was any new executive action to enact broad student loan forgiveness. But the White House also made clear that some form of widespread student loan cancellation remains under consideration. Here’s the latest.
Biden’s New Student Loan Relief: Extension of Payment Pause and Default Resolution
Yesterday, Biden announced an extension of the student loan pause. For over two years, payments on most federal student loans have been suspended, along with interest accrual and collections efforts against borrowers in default on their federal loans. After multiple extensions under President Trump and President Biden, the most recent extension was set to end on May 1. But Biden announced yet another extension to August 31, 2022.
Biden also announced a new “fresh start” initiative for borrowers in default on their federal student loans. Using executive action, defaulted federal student loans will be automatically rehabilitated and returned to good standing. This will allow borrowers to access key federal student loan programs like income-driven repayment and Public Service Loan Forgiveness, and start the process of repairing their credit.
Student Loan Forgiveness Still A Possibility
While advocates for student loan borrowers offered measured praise for the payment pause extension and default resolution initiative, they continued to urge Biden to use executive action to cancel student loan debt.
“We stood together to call on President Biden to extend the pause on student loan payments. Today, he delivered that critical relief to millions of Americans,” said Senate Majority Leader Chuck Schumer (D-NY) in a tweet. “We’ll keep standing together for President Biden to use his existing legal authority to #CancelStudentDebt.” Schumer has become a key leader in a long-running campaign to convince President Biden to cancel student loan debt using executive action.
On Wednesday, the White House expressly left open the possibility of executive action-based student loan forgiveness. White House press Secretary Jen Psaki told reporters that Biden "has not ruled out" using executive action to cancel substantial amounts of student loan debt.
Psaki’s comments echo those of White House Chief of Staff Ronald Klain last month. “The President is going to look at what we should do on student debt before the [payment] pause expires,” said White House Chief of Staff Ronald Klain in an interview with Pod Save America earlier in March. “Whether or not there is some executive action [on] student debt forgiveness when the payments resume is a decision we’re going to take before the payments resume.”
Biden Has Several Options To Cancel Student Loan Debt Through Executive Action
The extension of the payment pause could indicate that Biden officials are still considering the scope and mechanism of an executive action-based student loan forgiveness initiative.
Biden may have several potential options that could be utilized to cancel student loans without relying on Congress to pass new legislation. This includes broad (but somewhat disputed) authority under the Higher Education Act that gives the Secretary of Education the ability to compromise or waive federal student loan balances in certain circumstances, as well as emergency authority under the HEROES Act of 2003 that allows federal officials to modify existing student loan programs. Biden could also use the regulatory process to dramatically revamp certain federal student loan repayment or forgiveness programs, such as by creating a far more generous income-driven repayment plan that has lower payments, a shorter repayment term, and broader eligibility rules than what is currently available.
Last year, Biden directed officials at the Education and Justice Departments to draft a memo analyzing potential legal authorities that could allow broad student loan forgiveness. While officials initially suggested that memo would be prepared within a matter of weeks, its contents have not been made public 12 months later.
Further Student Loan Reading
Biden’s Latest Student Loan Relief Includes This Major New Benefit
4 Options For Biden To Legally Enact Student Loan Forgiveness Without Congress
Who Qualifies For $6 Billion In Student Loan Forgiveness Announced By Biden Administration
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Student Loan Forgiveness By Executive Action Is Still On The Table, Says Top Biden Official - Forbes
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