Senators Elizabeth Warren (left), Senate Majority Leader Chuck Schumer (center) and Bernie Sanders … [+]
These U.S. senators want $50,000 of student loan cancellation.
Here’s what you need to know—and what this means for your student loans.
Student Loans
Elizabeth Warren and Chuck Schumer aren’t the only U.S. senators who support student loan cancellation. There are at least 14 other senators who support student loan cancellation up to $50,000, and they want Biden to forgive student loans by executive order. These 16 senators signed on to a resolution that calls on President Joe Biden to enact student loan cancellation by executive order. The question is: will it even be their decision?
Student Loan Cancellation: what the resolution says
The bicameral resolution, which was introduced in Congress earlier this year, focuses on the president’s ability to cancel student loans unilaterally without Congress, including:
- $50,000 of Student Loan Cancellation: Calls on Biden to use executive action to cancel up to $50,000 in federal student loan debt using existing legal authority under section 432(a) of the Higher Education Act of 1965;
- Close Wealth Gap: Encourages Biden to ensure that administrative student loan debt cancellation helps close racial wealth gaps and avoids the bulk of federal student debt cancellation from benefitting the wealthiest borrowers; and
- No Student Loan Payments: Encourages Biden to continue to pause student loan payments and interest accumulation for federal student loan borrowers for the entire duration of the COVID-19 pandemic.
“Cancelling up to $50,000 in debt would provide immediate financial relief during this unprecedented economic crisis and lift the weight off the backs of countless American households,” Senate Democratic Whip Dick Durbin (D-IL) said. “I am proud to join this resolution, which will help narrow the racial wealth gap and give millions a fresh start as we continue to grapple with this pandemic.”
The 16 senators include Senators Chuck Schumer (D-NY), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Dick Durbin (D-IL), Tammy Duckworth (D-IL), Chris Van Hollen (D-MD), Jeff Merkley (D-OR), Edward J. Markey (D-MA), Cory Booker (D-NJ), Ron Wyden (D-OR), Brian Schatz (D-HI), Jon Ossoff (D-GA), Ben Ray Luján (D-NM), Robert Menendez (D-NJ) and Bernie Sanders (I-VT).
Student loan forgiveness: what this means for your student loans
Student loans: Biden’s actions
This resolution, as well as other political pressure and lobbying, has led to Biden proactively addressing student loan cancellation both in principle and practice. First, Biden has shared his perspectives on student loan cancellation, including his support for Congress to pass legislation for wide-scale student loan forgiveness of $10,000 for each borrower. Second, Biden has clarified that despite this resolution, he doesn’t support up to $50,000 of student loan cancellation nor does he believe a president has the authority to enact wide-scale student loan cancellation by executive order. Third, Biden has acted to forgive at least $2.3 billion of student loan debt since becoming president. America already has reacted in different ways to Biden cancelling student loans. For example, Biden cancelled $1 billion of student loans for 72,000 student loan borrowers. He also cancelled another $1.3 billion of student loans for 41,000 borrowers with total and permanent disability. Fourth, Biden has asked the U.S. Department of Education to conduct a legal review on his authority to enact student loan cancellation unilaterally by executive action without further congressional authorization.
Student loans: Congress
To further her case for wide-scale student loan forgiveness, Warren held an explosive congressional hearing on student loans and student loan cancellation. During the hearing, Warren discussed the adverse impact student loans have had on borrowers—many of whom she said have had negative experiences with their student loan servicers. Warren not only renewed her call to cancel student loans, but also said that Navient—one of the nation’s largest student loan servicers—should be fired from servicing federal student loans and that Navient’s CEO, Jack Remondi, should be fired too. In addition to reforms for student loan repayment, there is a separate new proposal calls for student loan cancellation for public servants to get student loan forgiveness after 10 years of service, even if they haven’t fulfilled any requirements or met any qualifications.
The supporters of this student loans resolution are mostly progressive Democrats. In addition to the senators, there are multiple progressive members of Congress as well, including Rep. Alexandria Ocasio-Cortez (D-NY), Rep. Ayanna Pressley (D-MA) and Rep. Ilhan Omar (D-MN). However, moderate Democrats — who hold significant power in the evenly-divided Senate — haven’t supported this resolution. To pass student loan cancellation, Schumer and Warren need the support of all 50 Democrats. This begs the question whether moderate senators will support any legislation for wide-scale student loan forgiveness. So far, there doesn’t seem to be much support for $50,000 of student loan cancellation, let alone support for any student loan cancellation. Congress hasn’t even drafted a bill on student loan forgiveness that Congress can pass. Therefore, they’ve pinned their hopes on Biden acting on student loan forgiveness through executive action. Following completion of the Education Department’s legal review in the coming weeks, Biden could decide his next steps on student loan forgiveness, including whether there will be student loan forgiveness, who qualifies, and who, if anyone, will cancel it.
As you evaluate your options for student loan repayment, make sure you consider these potential options:
