Senate Majority Leader Chuck Schumer tweeted that President Joe Biden should cancel student loans today. Then, Twitter erupted.
Here’s what you need to know.
With a new stimulus package and impeachment trial before the U.S. Senate in the coming weeks, Schumer again pressured the president to cancel student loan debt. In a tweet today, Schumer wrote: “Today would be a great day for President Biden and Vice President Harris to #CancelStudentDebt.”
While Schumer’s tweet garnered support, with nearly 76,000 likes and almost 9,000 retweets, Schumer’s tweet was also criticized by other Twitter users, who raised several objections. For example:
Pass a stimulus package first
One person tweeted: “Yes it would be. Would also be a good day to pass a Covid relief bill.” Biden sent Congress a $1.9 billion stimulus package, which includes $2,000 stimulus checks and unemployment insurance, as part of financial relief in response to the Covid-19 pandemic. However, Biden’s stimulus package doesn’t include student loan forgiveness. Student loans also were dropped from the last stimulus package. Many Americans want Congress first to focus on passing another stimulus package before any proposed student loan cancellation.
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Cancel mortgage debt too
Another user: “Can you cancel my mortgage…can I go buy a new truck and get that cancelled too??” Critics of student loan forgiveness often cite, quite correctly, that mortgage debt is a much larger consumer debt issue than student loans, which might warrant cancellation before there is any student loan debt cancellation.
Pay back people who already paid off student loans
Another user: “I am a liberal to the core. But I paid for my kids. I would have loved that Ferrari. Would you give me my money back?” If Congress cancels student loan debt, will they pay back, or provide a tax credit to, former borrowers who paid off student loans and therefore don’t qualify for student loan cancellation?
Cancel all student loans
Another user: “Biden should cancel ALL of it. $10k is not enough. $50k is not enough. We need full cancellation, Senator.” Sen. Bernie Sanders (I-VT) proposed that Congress cancel all $1.7 trillion of student loan debt. Current proposals, among others, include either $10,000 or $50,000 of student loan debt collection. Some have argued for Congress to cancel all student loan debt at once.
Pay your own student loans
Another user: “…[This is unfair for] every student who worked their way through college, suffered through community college to save, for those who served to get free college and for those who scrimped and saved to already pay loans back…You can’t make any argument to me that my family should pay for your kids or your college…We paid for ours. You pay for yours.” Others argue that student loan repayment is about personal responsibility, and that it’s unfair to require some taxpayers to pay student loans for other taxpayers. They argue that millions of Americans made financial and other sacrifices to pay for college and shouldn’t have to pay student loans for others who will get what amounts to “free money.”
What this means for your student loans
Biden wants Congress to cancel student loans
The timing of the tweet is somewhat curious, as Congress is in the middle of considering a new stimulus package and commencing an impeachment trial. That’s not to say student loan cancellation isn’t important. Millions of student loan borrowers are hoping for at least some student loan forgiveness. Supporters say that student loan cancellation will stimulate the economy, reduce disparities, encourage new business formation, promote family formation, encourage home buying, spur retirement savings, and help a generation of Americans be free of student loan debt. Biden has said repeatedly that he wants student loans cancelled immediately. However, Biden wants Congress to pass legislation to cancel student loans. Schumer and Sen. Elizabeth Warren (D-MA) say that a president can cancel student loans through an executive order. They want Biden to cancel up to $50,000 of student loan debt for all borrowers who earn less than $125,000 per year. Schumer and Warren say the Higher Education Act of 1965 already empowers the U.S. Secretary of Education to cancel student loans without further authorization from Congress.
Biden likely won’t cancel student loans through an executive order
Biden has already said he’s unlikely to cancel student loan debt through an executive order. He doesn’t believe that a president can simply cancel student loan debt through executive action, and if he tried, litigation likely would follow, which could delay widescale student loan cancellation. It’s unclear why Schumer has continued to pressure Biden, who is a fellow Democrat, about cancelling student loans through executive action. One theory is Schumer thinks that Biden may cave to pressure. That’s less likely, as Biden has been clear on his position. Biden wants Congress to pass standalone legislation or include student loan cancellation in a stimulus package. It’s not that Biden doesn’t believe an executive order can be used for student loan relief. For example, Biden paused federal student loan payments — through an executive order — for eight months on the first day of his presidency. Unlike outright student loan cancellation, this temporary student loan forbearance doesn’t exempt borrowers from eventually repaying their student loans. The U.S. Department of Education during the Trump administration also opined that a president can’t unilaterally cancel student loans for all student loan borrowers.
Can Congress pass student loan cancellation?
The optics aren’t great for a Democratic leader to tacitly criticize a Democratic president, particularly in the first two weeks of the latter’s presidency. Also, Schumer’s tweet — while it may be popular among some progressive members of the Democratic party — raises questions whether Schumer thinks he can pass student loan cancellation in Congress. Perhaps his tweet is simply a call to action, but it may signal something entirely different brewing behind the scenes. Senate Minority Leader Mitch McConnell (R-KY) and fellow Senate Republicans will oppose student loan cancellation for many reasons. Expect a student loans showdown. Biden has been active with multiple executive orders, but student loan cancellation wasn’t one of them and there’s no indication that student loan forgiveness will come through executive action. Therefore, the bigger question is this: can Schumer get student loans cancelled?
Will your student loans get cancelled?
Will your student loans get cancelled today? No. Biden has proposed to cancel student loans three ways. However, despite Schumer’s tweet, it’s unlikely Biden will cancel student loans through executive action, leaving Congress to pass legislation. That said, even if it’s a policy priority and Democrats control Congress, there’s no guarantee that Congress ultimately cancels student loan debt. Therefore, make sure you are prepared and have a game plan for your student loans, if Congress doesn’t cancel student loans. Start with these three options, all of which have no fees: