Last week, Speaker of the House Nancy Pelosi stated that President Biden will not be able to forgive student loan debt without Congressional approval. Here’s how Pelosi’s statement and the conversation around student loan forgiveness could impact your student loan debt.
1 current trend within student loans for the week of Aug. 2, 2021
1. Nancy Pelosi argues that Biden cannot forgive student loan debt through executive action
While President Biden waits for the results of a legal review about his authority to cancel student loan debt through executive action, Speaker of the House Nancy Pelosi told reporters that she doesn’t believe it’s possible.
According to Pelosi, the president can “postpone, delay but not forgive” student loans. While many Democrats have pushed Biden to use his executive authority to cancel debt, Pelosi stated that it would take an act of Congress.
In the same interview, Pelosi also raised concerns over the ethics of mass forgiveness, claiming that it wouldn’t be fair for families without a child in college to have their taxes increased as a result of mass forgiveness. Canceling this debt “has to be viewed in a fair way where we have something that gives opportunity — that’s the big word, opportunity — to all of America’s families,” she said.
How this affects student loans
The administration’s official legal review on student loan forgiveness has been ongoing since April, so any definitive possibility of student loan forgiveness will have to wait for the U.S. Department of Education’s conclusion. Pelosi’s comments signal that the Democratic party is still divided on the issue; progressives like Chuck Schumer and Elizabeth Warren, as well as some student loan legal experts, have claimed that widespread student loan forgiveness is within Biden’s power.
Regardless, borrowers shouldn’t count on legislation; even if student loan forgiveness does end up happening, it’s best to stay up to date with payments in the meantime. There are already existing programs that help federal student loan borrowers receive partial forgiveness, and borrowers who are struggling to make payments can request forbearance or a different repayment plan.
Here’s how you can get prepared
Whether you’re new to student loans or well into repayment, it’s wise to stay informed about how your student loan rates could change. As 2021 continues, more opportunities for cheaper loans or loan forgiveness could open up; keep an eye on the Bankrate student loans news hub for the latest trends.