Elizabeth Warren to Joe Biden: Canceling Student Loans
Elizabeth Warren wants Joe Biden to cancel student loans.
Here’s what you need to know.
Senator Elizabeth Warren (D-MA) tweeted today that President-elect Joe Biden and Vice-President-elect Kamala Harris can write off “billions of dollars in student loan debt.” According to Warren’s tweet, canceling the student loan would be the most effective option to stimulate the economy:
“1. Biden-Harris can write off billions of dollars in student loan debt, giving tens of millions of Americans an immediate financial boost and helping close the racial wealth gap. most effective executive action available for massive economic recovery. ”
Cancel student loans
- Warren and Senator Bernie Sanders (I-VT) have defended the cancellation of student loans during the presidential campaign. Sanders called for a complete cancellation of student loan debt.
- For example, Sanders proposed that the federal government write off all $ 1.6 trillion in student loans, including private and federal student loans. Warren proposed a student loan forgiveness to 95% of Americans and reportedly capped student loan forgiveness based on income.
- Sanders and Warren also support the continuation of the Public Service Loan Forgiveness Program, a federal program that waives federal student loans for borrowers who work full-time for a qualified nonprofit or public service employer.
- In contrast, President Donald Trump and US Secretary of Education Betsy DeVos support the end of the civil service loan forgiveness program.
- Trump and DeVos support student loan cancellation through income-based repayment plans, which are available for borrowers to repay federal student loans. However, they do not support a separate student loan exemption plan for public servants.
Forgive student loans by executive action?
There are several potential ways for Biden to cancel student loans. Warren also believes that a president, without Congress, can cancel student loans through executive action. Specifically, Warren said the Higher Education Act allows the US Secretary of Education to waive student loans without further authorization from Congress. However, jurists do not universally accept this position. Traditionally, under the US Constitution, only Congress has the power to write off student debt. Senator Elizabeth Warren (D-MA) and Senator Chuck Schumer (D-NY) presented a resolution to Congress which would, in the wake of the Covid-19 pandemic, allow Trump to cancel up to $ 50,000 in student loans. More specifically, the resolution:
- cancel federal student loans, not private student loans.
- If they are not forgiven, Warren and Schumer argue that student debt will continue to increase inequalities and income disparities.
- This proposal to cancel student loans could also stimulate the economy.
Currently, this is only a proposal and not a law. Congress is expected to approve Warren and Schumer’s proposal for Biden to act on the student loan cancellation.
Warren, who helped found the Consumer Financial Protection Bureau and is a potential candidate for Biden’s treasury secretary, has long advocated for student loan cancellation. As a presidential candidate, Biden asked for student loan cancellation. However, his call for outright student loan cancellation was limited to $ 10,000 for student loan borrowers. who are impacted by Covid-19. This is different from other proposals which have called for canceling student loans for all borrowers, and in some cases without limitations.
The composition of the US Senate, which is still unclear, could determine whether its latest proposal to cancel student loans becomes law. If Republicans retain control of the US Senate, the Warren-Schumer proposal is unlikely to pass. Biden could cancel student loans as part of a broader congressional stimulus package, although there is no guarantee that student loans will be included. If the economy improves, Senate Republicans will be less likely to approve more federal spending due to Covid-19. In addition, it is not known if there is a student loan forgiveness, which would exactly be eligible. For example, Congress or Biden could limit student loan cancellation based on income or whether a borrower has been directly affected by Covid-19.
Pay off student loans
Whether Congress or Biden act to cancel student loans, it’s unclear how and when that might take shape. In the meantime, get ready and come up with a student loan game plan. Here are some great places to start paying off student loans, all of which are zero-fee: