Student debt is reaching a crisis level as college costs grow year after year, and interest rates keep many people in debt. President Biden has already extended the pause on student federal loan payments during the pandemic until September 30, 2021.
But as vaccines roll out and an end to the pandemic may be in sight, many are wondering what happens to their student debt when the pause ends.
Will President Biden Cancel Student Debts?
The president has said in the past that he did not think he could cancel student debt with an executive order. He felt he lacked the legal authority to make this change.
He has said he is more than willing to support legislative action by Congress to cancel $10,000, but many Democrats in Congress say that isn’t enough. They are calling for the president to use an executive order to forgive $50,000 of student loan debt per person.
Past Debt Forgiveness
The Department of Education has already canceled the debt of around 72,000 students who were defrauded by colleges and universities. And in March 2021, it canceled $1.3 billion in debt for student borrowers with disabilities.
Now, the president is exploring options with his education secretary, Miguel Cardona, to use the power of executive orders. This may be promising news for those hoping for student debt cancellation.
What Would an Executive Order Actually Do?
In past comments from President Biden, he mentioned hopes for:
- Cancellation of some or all “debilitating” student loan debt
- 0% interest rates on student loans going forward (this is already part of the temporary pandemic relief)
- Debt relief for public-sector workers and students who have been defrauded by for-profit schools
An executive order might not help those who attended top-tier elite schools or earn higher wages.
The exact policy is still being considered. We can expect more announcements from the White House regarding executive order authority and canceling student debt soon.