Is President Joe Biden Able to Forgive Student Loans?

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President Biden said unequivocally that he does not intend to include student debt forgiveness in his yearly White House budget. In accordance with previous comments made by the president since taking office in January, he said he hopes Congress will pass some kind of forgiveness legislation. Even while many major Democratic leaders in Congress have openly urged Biden to use an executive order to erase a portion of debt for borrowers nationally, it is unclear if the president has the legal power to do so. This problem seems to be a political hot potato, with everyone wanting credit for the concept but no one wanting the heat of doing the task actually.

Maybe Joe Biden can erase student debts, maybe he can’t, but one thing is certain: relying on the government to solve your financial issues is a bad way to live.

Regardless of who is in charge of the White House, the responsibility for regaining control of your finances is always completely in your hands. Let’s take a look at what Biden and other political leaders are saying about student loans—and how their ideas should affect your personal budget.

Is it possible for the President or other government officials to forgive student loans?

Politicians make a lot of promises, but such pledges should be taken with a grain of salt. Even a good concept, like attempting to assist individuals who are suffering with student loan payments, cannot go forward without the support of legislators from both national parties in Congress. And even if a plan to erase student debts becomes law, it will still be subject to legal challenges if anybody believes the new legislation is unconstitutional.

Several presidential contenders have mentioned intentions to erase student debts during the 2020 election season. Senators Biden, Sanders (I-VT), and Warren (D-MA) were among them (D-MA).

Biden has raised the ante since November. He has mentioned issuing an executive order or backing legislation that would cancel a portion of federal student debt. Up to $10,000 in forgiveness is supported by Biden, and other Democrats are asking for much more. 1

But is student debt forgiveness something the president can do, much alone something that is likely to happen once Biden takes office? Here are some recent events involving forgiveness, as well as the legal details of how it works:

What’s the bottom line? These are just that: suggestions. And, whether they become legislation or not, no one should base their financial future on political promises.

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What Has Vice President Joe Biden Said About Student Loan Forgiveness?

In terms of Biden, he has suggested forgiving $10,000 per loan.

7 He based his estimate on a House bill approved earlier this year as part of a $3.4 trillion coronavirus remedy package. 8 (The measure was defeated in the Republican-controlled Senate.)

When asked about student debt forgiveness at a news conference in November, Biden replied, “It does factor in my plan.”

9 However, he did not specify how he would want the debt forgiveness to be implemented, whether via executive action or through a Congressional legislation. In case you’ve forgotten, a congressional act is sometimes shorthand for “impossible.”

We’ll say it again because it can never be overstated: don’t turn to the government to fix your financial problems.

What Amount of Debt Forgiveness Is Proposed in the Senate Resolution?

Sure, Biden says $10,000, but are there any larger spenders in government trying to “assist” impoverished indebted citizens? You can bet on it!

How does 50,000 smackeroos sound per borrower? If so much debt forgiveness occurred, you could start hearing spontaneous debt-free cries all across the United States! But, before you transfer your student loan payments to another line item in your budget, let’s take a look at what these enthusiastic legislators are up to.

A Senate resolution introduced by Senators Elizabeth Warren and Charles Schumer has received the greatest attention on social media (D-NY). It is once again linked to assisting debtors affected by the coronavirus epidemic. It requests that the president issue an executive order canceling up to $50,000 in federal student loan debt for debtors. 10 If you can obtain it, this is a great present! It’s no surprise that so many people are tweeting #cancelstudentloans!

But, in this context, what precisely does the term “resolution” mean? It has approximately the same impact as a New Year’s resolution—a it’s lovely idea, but it’s meaningless in and of itself. A Senate resolution merely states that the person or persons who authored it believe it should be law, but it has no legal authority.

The sponsors of a resolution must persuade enough of their colleagues to support it in order for it to become law. Even if that occurs, someone—usually the taxpayer—will have to pay for it all.

With or without passage, the resolution may persuade the president to issue an executive order canceling $50,000 of debt per borrower, or any lesser sum. Or he might totally disregard it. But, regardless of what Biden thinks of the resolution, the paper it’s written on is still paper—and it doesn’t give him any additional power to erase student loan debt right now.

The Senate resolution also includes the following features:

What Should You Do Today About Your Student Loans?

Wouldn’t it be great if you could undo anything terrible in your life? Sure! If there was a stop button for all of life’s hurts and pains, we’d be pushing it all day. However, there are no magic wands in reality. And there aren’t many easy answers that don’t cost someone money or effort—or, more frequently, both!

So, how reasonable is it to expect some relief from student debt forgiveness?

Well, it’s not completely out of the question. But it’s also very improbable. A contentious action like canceling student loans requires much more than public relations and trending tweets.

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