What Biden’s annual budget means for student loan forgiveness
President Joe Biden on Friday unveiled his $ 6 trillion budget request for fiscal year 2022. The proposal mostly covers programs that have already been on the table, such as improving US infrastructure, and leaves out several large-scale campaign proposals from Biden, including canceling student loans. .
During the election campaign, Biden suggested he would like to write off $ 10,000 in student loan debt per federal borrower, and he spoke about the student debt burden. However, with this new budget proposal, experts are now wondering if the cancellation of the student loan is possible in the near future.
A $ 10,000 student loan forgiveness seems less likely
Biden leaving the remission off budget is not an indication that he won’t forgive student loans, but it is an indication that the remission of student loans is not an immediate priority.
While cancellation through Congress is still possible, Biden would face a deadlock in Congress, with the issue divided among parties and even some Democrats split on whether or how much student debt should be canceled.
Biden could instead pursue executive action to write off student debt, but that too is still in question. Education Secretary Miguel Cardona is overseeing a legal review of Biden’s power to cancel debt, but the administration has been silent on the issue since early April. This, coupled with the budget proposal, could indicate that the sweeping student loan cancellation measures proposed during Biden’s campaign are not being considered at this time.
Budget could make higher education cheaper in other ways
While the student loan cancellation is not included in the budget, the document includes funding for the higher education plans detailed in the Biden Families’ U.S. Plan. The budget plans to implement two years of free community college and invest in making the college more affordable for students who historically attend Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and Institutions in the United States. Minority Service (MSI).
Another great proposal is an increase in the maximum amount of the Pell Grant of $ 1,875 – granting the increase of $ 1,475 included in the US Families Plan, plus an additional increase of $ 400 through the budget itself. This would mark the largest one-time increase in grant history and “represents an important first step in meeting the President’s goal of doubling the grant.”
Smaller-scale proposals are more likely to become policies
Many student loan borrowers have bet on the possibility of a forgiveness of their student loan. However, even as Biden’s biggest forgiveness proposals remain in limbo, the administration has reaffirmed its commitment to seeking other ways in which student loan borrowers can find relief.
The budget specifically mentions that the administration will work with Congress to improve Income-Driven Repayment Plans and Public Service Loan Remission (PSLF), both of which write off some of borrower debt after several years of payments. The US Department of Education has already scheduled hearings to review some of the most important federal programs that offer targeted student loan cancellation, including borrower repayment defense, PSLF, and total disability relief. and permanent (TPD).
“The main responsibility of the Department of Education is to serve students and borrowers,” Cardona said in a Press release. âThis means taking a fresh look at a range of regulations to ensure that they don’t create unnecessary barriers, but can instead ensure that institutions and programs serve our students well. “
Any revisions to existing programs could also be informed by members of Congress, dozens of whom recently signed a letter to Cardona calling for reforms to the PSLF. This letter proposed the following changes:
- Make all federal loans eligible for the program.
- Make all repayment plans eligible for the program.
- Waive employment restrictions upon reimbursement.
- Automatically qualify borrowers for the program.