Student Loan Forgiveness Leaves Both Democrats And Republicans Thoroughly Upset With Biden

Student loan forgiveness leaves both Democrats and Republicans thoroughly upset with President Joe Biden.

Here’s what you need to know.

Student Loans

When it comes to student loans, Biden arguably has been one of the most active presidents. He’s extended the student loan pause four times. Biden has canceled $17 billion of student loans. He’s also committed to reforming student loan repayment and student loan forgiveness. (Biden drops student loan cancellation from budget). Despite these accomplishments, some Democrats and Republicans are still unhappy with Biden’s strategy for student loans. Here’s why.


Student loans: Why Democrats are upset with Biden

Last week, Biden announced that federal student loan payments won’t restart until September 1, 2022. That’s a major win for student loan borrowers, who haven’t been required to make any federal student loan payments since Biden became president last January. (New proposal would extend student loan payment pause and cancel student loans). Democrats welcome the four extra months of the student loan pause. However, what they really want is wide-scale student loan cancellation. To many Democrats, the student loan pause is helpful, but it’s a temporary measure. (Student loan cancellation and the student loan payment pause are confusing. Here’s what to know). In contrast, student loan forgiveness is permanent student loan relief. The amount of student loan cancellation varies depending on who you ask. For example, Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) want Biden to cancel up to $50,000 of student loans for borrowers. Other legislators such as Sen. Bernie Sanders (I-VT) want Biden to cancel all private and federal student debt. Progressive Democrats have warned Biden that failure to enact wide-scale student loan cancellation before the midterm election in November could be disastrous for Democrats. (If student loans don’t get canceled, borrowers threaten to vote against Democrats). Why? For progressive Democrats, their constituents are counting on wide-scale student loan forgiveness, and without that student loan relief, low voter turnout could result in Democrats losing control of Congress.


Student loan pause: Republicans say it’s “outrageous” and benefits wealthier borrowers

Not everyone is cheering Biden’s extension of student loan relief. Most Republicans in Congress think Biden’s student loan payment pause is poorly targeted toward wealthier borrowers and an inefficient use of government resources. “President Biden’s perpetual student loan payment moratorium is an insult to every American who responsibly paid debts,” Sen. Tom Cotton (R-AR) tweeted. For Cotton, student loan repayment is about personal responsibility. If student loan borrowers don’t repay student loans they legally borrowed, Cotton says the government will be stuck footing the bill. (Student loan payment pause: Senator says extending student loan relief is unfair to most Americans). Rep. Virginia Foxx (R-NC), the top Republican on the House Committee on Education and Labor, said, “The outrageous extension of this moratorium contradicts the administration’s promise to the American public and without any basis other than the President’s sinking poll numbers.” (Biden could extend the student loan payment pause forever). Foxx says that the student loan pause will cost the federal government more than $200 billion.


Student loans: what Biden can do next

Biden is still considering wide-scale student loan forgiveness. Biden could continue to cancel student loans on a targeted basis for specific groups of student loan borrowers. Alternatively, he could announce wide-scale student loan cancellation for all or most student loan borrowers. Or, he could enact student loan forgiveness for borrowers who are struggling financially. Finally, Biden could maintain his current position that Congress should cancel $10,000 of student loans and he doesn’t have the legal authority to act independently without further congressional authorization. If Biden cancels student loans, it likely would happen before the November midterm election. No matter which way Biden decides, his decision likely will upset Democrats or Republicans, or both. One thing is for sure: the student loan pause is scheduled to end on August 31, 2022. Are you prepared for the restart of student loan payments? While student loan relief is temporary, your student loan repayment plan should be long-term focused.

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