What The New Stimulus Package Says About Student Loans

The new stimulus package says this about student loans — and student loan cancellation.

Here’s what you need to know.

Student Loans

The new, $1.9 trillion stimulus package that President Joe Biden proposed doesn’t include any student loan cancellation. The stimulus plan instead focuses on other policy priorities like $1,400 stimulus checks and $600 a week unemployment insurance. Senate Republicans have proposed a separate $618 billion stimulus package — about a third the size of Biden’s stimulus plan — that also excludes student loan cancellation and offers $1,000 stimulus checks as a response to the Covid-19 pandemic.

So, what does this all mean for student loan cancellation?

1. Congress may not cancel student loans in the stimulus package

Biden has said he wants Congress to cancel student loans immediately. Under his proposal, student loan borrowers would get $10,000 of student loan forgiveness in response to the Covid-19 pandemic. The operative word in this statement is “Congress,” meaning that the legislative branch, not the president through executive order, will be tasked with student loan cancellation. It’s still possible that Congress passes student loan cancellation in the stimulus package. However, there are several roadblocks. First, Republicans don’t support widescale student loan cancellation. Second, Biden’s proposal doesn’t include student loan forgiveness. Third, Congress dropped student loan cancellation from the last stimulus package. While Majority Leader Chuck Schumer (D-NY) says student loan cancellation is a top priority, Schumer has focused on pushing a $50,000 student loan cancellation plan on Biden. For example, Schumer tweeted at Biden — a fellow Democrat — to cancel student loans, even though Biden has said repeatedly that he’s unlikely to do so and wants Congress to act instead.

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