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Is Student Loan Debt Forgiveness Realistic?

During President Joe Biden’s campaign, a key position was that, if elected, he would implement student loan forgiveness programs. Student loan debt is a pertinent issue in the United States with $1.57 trillion of outstanding debt as of 2020, a statistic which will likely continue to grow. Since assuming office, Biden has canceled $11.5 billion of student loans — a sum more than any previous president. How will this loan annulment affect the average borrower?

The current programs have been enacted through forgiveness of federal student loans through borrower defense to repayment and various disability measures. Biden’s loan cancellation to public servants, the Public Service Loan Forgiveness Program, has recently undergone significant changes. Some of these alterations include which classifications and specific loans can be forgiven, when student loan payments are eligible for forgiveness and which employers qualify for student loan forgiveness. 

Presently, the loan forgiveness program is not all-encompassing, and not every public servant qualifies for loan forgiveness. Biden’s plan, in conjunction with the Department of Justice, has authorized only targeted loan cancellations. Many accounts have been published of borrowers who held lengthy public service or nonprofit positions, yet have not received any loan cancellation and continue to be overwhelmed by debt. The current changes to the loan policy appear to be more concerned with making student loans more accessible to borrowers.  

There is also the question of whether Biden has the legal authority to pardon such large sums without the approval of Congress, which has yet to pass any legislation pertaining to the issue. The president advocates for a comprehensive student loan forgiveness of up to $10,000, whereas other members of the Democratic Party, including Sen. Elizabeth Warren of Massachusetts and Sen. Majority Leader Chuck Schumer of New York, are championing the motion for up to $50,000 in wide-scale loan cancellation. While the two parties agree that a wide-scale student loan forgiveness program should be instated, they differ on the amount they believe should be excused. 

There is also some uncertainty about how this cancellation will come about. Biden states only Congress has the authority to permit legislation for this action. Warren and Schumer, on the other hand, claim Biden can cancel debt through use of an executive order accordant with the Higher Education Act of 1965

The act states the the president can “modify, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” 

This language, however, is somewhat ambiguous. Therefore, a comprehensive cancellation of student loan debt could be considered a violation of executive authority and result in litigation. 

The Biden administration has yet to release a memorandum addressing his authority to extend loan forgiveness to millions of other Americans. As recently as this April, Biden has stated that he has requested a memo from the U.S. Department of Education relating to student loans; the motion, however, has since yielded silence. Progressive Democrats, including Rep. Ilhan Omar of New York and Rep. Alexandra Ocasio-Cotez of New York, have asked Biden to release the memo by Oct. 22. 

“President Biden’s memo is something that many of us in the education community have been eagerly awaiting,” Nivine Megahed, the president of National Louis University, told Forbes

Through her words, Megahed called for action. 

 “The weight of student loans on the well-being of college graduates and on our overall economy has been crushing,” she said. “We must take action now.”

In the same article, Mark Kantrowitz, a student loan expert, said the report may be held up due to delays in the confirmation of relevant senior policy staff. Kantrowitz also says that, once released, the report will state that “only Congress has the power of the purse.” 

Furthermore, it is possible the Biden administration is waiting for Congress to pass the infrastructure bill and the Build Back Better Act, as well as address issues such as the debt ceiling, before proposing a student loan forgiveness program. 

Despite compelling lobbying from progressive Democrats, Biden has not indicated he intends to use an executive order to extensively cancel student loans. The proposed sum of $50,000 in cancellations also appears unlikely. Furthermore, the fact Biden has consistently opted for targeted cancellations rather than comprehensive forgiveness suggests a limited amount of student loans will be pardoned. All the current debt forgiveness measures have also been enacted in unison with Congress and the U.S. Department of Education. Use of an executive order to void student loan debt could result in indeterminate delays to the forgiveness program because of litigation. 

Additionally, the passage of a robust student loan forgiveness program poses complications due to its political nature that could result stall progress on other pressing issues, such as infrastructure. The congressional memo is also likely to conclude the president does not have the authority to enact student loan forgiveness, which could diminish support for the Democratic party because, in recent times, debt cancellation has been one of the group’s major policy positions. 

Biden will likely continue to enact loan cancellation, although the forgiveness program will likely be significantly less far-reaching and of a smaller quantity than many anticipated. Student loan debt forgiveness also does nothing to address the underlying issue of the rising cost of higher education in the United States, which, if unaddressed, will present repercussions well into the future. In the present reality of waiting for Biden’s student loan forgiveness memo, however, millions of Americans are left uncertain of their loan forgiveness status and, thus, unable to effectively plan their financial future.

Anisha Paul is a freshman at the University of Florida majoring in computer science. She is currently a features writer for HerCampus UFL.
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