2022 is just around the corner and the talks about mass student loan cancellation is still on the table. It’s been several months already since President Biden ordered the Education Secretary to look into the president’s authority to cancel student loans unilaterally. Yet to this date, we do not have a clear answer at all.
Instead, the Biden administration has continued to pursue a targeted approach to loan cancellation. We’re not seeing $10,000 or $50,000 being wiped out of each borrowers’ accounts, but at least we’re getting students loans from specific groups being cancelled.
$2B in Student Loans Forgiven!
Secretary of Education, Miguel Cardano, tweeted some good news last week.
Good news! Over the coming weeks, more borrowers – including veterans & service members – will get emails about #PSLF debt cancellation.
Here are the details:
– 30K+ borrowers will get an estimated $2B forgiven.
– Roughly 10K have already had $715M discharged.
– 20K will receive emails in the coming weeks.Check your inboxes!
Miguel Cardona, Twitter @SecCardona
So if you’re a veteran or a service member who have applied for PSLF, then this is indeed good news. $715 million has already been cancelled, and more will be in the next coming weeks. Make sure to, like Cardona said, “check your inboxes” as it may contain information on how to proceed with PSLF.
The administration seems to try their best to keep their promises for PSLF.
I was looking through Reddit for proofs of forgiveness and I saw a lot. They keep a running tally of who in the community got their loans forgiven and the total amount of wiped out. At the moment, it’s at $10M.
People have been posting their experiences signing in to their servicer’s website and finding that their balances of $100,000, or even $200,000, have been completely wiped out.
I wanted to find screenshots of confirmation emails, but borrowers there haven’t received any since they were told those emails will be coming in in the next month or two.
Check that Reddit community so you can learn about others’ experiences with PSLF. And if you’re one of the recipients for PSLF and have your loans forgiven, share your win there. It will really help the community gather more support and momentum.
This also gives us an idea of whether or not the administration is actually keeping their promises. The more recipients share their experiences, the more accountable we can make the government.
Congratulations to all the PSLF recipients! I hope you use this opportunity to start over with a clean slate, and be more financially conscious. Use this as a springboard to get yourself out of debt and live a more financially free life.
Biden’s Student Loan Memo
Recently, there was a report about Biden’s student loan memo that was met with mixed reactions.
In April, President Biden asked the Education Department to conduct a legal review of his authority to unilaterally cancel student loans without Congress’s permission.
Many expected that the findings of that review would be released in a matter of weeks. However, it has been months now and no memos or announcements were made about it.
Debt Collective, a debtors’ union fighting to cancel debts, obtained redacted documents from the Education Department through a Freedom of Information Act request.
In those documents, a heavily redacted memo may have suggested that it had existed since February 2021 and an updated draft was probably completed on April 2021.
Reading through the 113-page document gave me nothing to work on. (Check the document here) It was mostly correspondence between those who are involved in investigating the president’s legal authority.
Basically, ambiguous legal talk. The important details were obviously redacted, heavily in pink.
According to articles that I’ve read, many different claims were made about this document.
Claim #1: This inquiry started long before Biden became president.
Trump has already made a similar inquiry regarding his ability to cancel student loans, but they concluded that the president does not have unilateral, legal, executive authority to cancel an unlimited amount of student loan debt. It is very likely that Biden may have looked into this topic already throughout his campaign.
Claim #2: “Biden needs to cancel student loans now with his authority.”
We don’t know for sure if he really has the ability to do so. Other proponents for cancellation keep this stance because of an obscure provision in the Higher Education Act, giving the Secretary of Education “the authority to enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand.”
They’re claiming that given that the Department of Education is the largest student loan collector in the country, it “makes sense” that they have the power to cancel all of their student loan portfolio.
Claim #3: Washington is playing politics.
Everything is politics. You can’t remove that from the equation anymore. There is no proof as to why this memo wasn’t released earlier, or if a final draft were ever made. There is even no evidence that Biden has ever had a memo sitting in his desk for months either.
Biden has always taken the side of not being able to “sign it with a flick of a pen” without Congress. Congress, on the other hand, doesn’t even want student loans to be cancelled, even though Democrats hold a majority there.
You’d be surprised that most Democrats in Congress don’t even support cancelling all student loans. Only a handful of progressives do so. The main reason being cancelling student loans is costly. Republicans and Democrats usually don’t see eye to eye on federal spending, but for this one, they agree.
Final Thoughts
The only thing I can say about student loan cancellation is don’t expect it. You’re better off assuming that it won’t ever happen to you, but be happily surprised that it does. Memos aren’t binding. They’re like correspondence. It doesn’t have any legal binding until it transforms into a law.
So without expectations for mass cancellation, it’s best to prepare now before the payment pause ends.
Make sure to do these things now before February 2022:
- Know all your repayment options by contacting your student loan servicer.
- Adjust your spending and take into account student loan payments (if you haven’t been paying throughout the payment pause).
- Keep records of your student loan account statements, forgiveness applications or any correspondence related to student loans.