Progressive lawmakers are increasing pressure on President Joe Biden to write off student debt for millions of federal borrowers using executive action.
Among them is Sen. Elizabeth Warren, D-Mass., who openly called on the president to provide up to $50,000 in student loan relief per borrower. Warren serves on several Senate financial committees that focus on consumer protection and federal regulatory oversight.
“With the stroke of a pen, the President can #CancelStudentDebt and provide relief to 40 million Americans, continue our economic recovery, and close the racial wealth gap.”, Warren said in a Tweet Tuesday.
Warren isn’t the only prominent Senate Democrat who wants the Biden administration to take action on student loan debt. Senate Majority Leader Chuck Schumer, DN.Y., has called on the president to enact student loan forgiveness dozens of times on Twitter in recent months.
A number of House Democrats also urged President Biden to cancel student loans through an executive order on Twitter last week, including Reps. Ilhan Omar, D-Minn. ; Pramila Jayapal, D-Wash.; and Ayanna Pressley, D-Mass.
“It’s time to forgive at least $50,000 of student loan debt per borrower.”
Democrats argue the president should rely on his executive authority to deliver on his campaign promise to cancel federal student loan debt.
Biden himself has questioned his ability to forgive student debt using his presidential powers, and the White House recently indicated he is waiting for Congress to enact student loan forgiveness legislation. House Speaker Nancy Pelosi, D-California, agrees — she previously said canceling student debt “has to be an act of Congress.”
Keep reading to learn more about what the Biden administration is doing to provide student loan relief, as well as your alternative college debt repayment options like refinancing. You can compare free student loan refinance offers on Credible without affecting your credit score.
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Will Biden Forgive Student Loans?
As a presidential candidate, Biden campaigned to forgive a minimum of $10,000 in federal student loan debt per borrower. But a year into his presidency, he has so far been unable to deliver on that promise.
One of the issues facing the Biden administration is how best to enact student loan forgiveness legislation. As progressives continue to urge the president to write off student debt using executive action, Biden himself indicated in a February 2021 town hall that he does not believe he has the legal authority to advance this cause.
The Higher Education Act of 1965 gives the Secretary of Education the power to “enforce, pay, impair, waive or discharge any right” to collect federal student loans, but legal experts are divided on whether whether this includes a general forgiveness of student loans.
Since Biden took office, the Department of Education has written off $11.5 billion in student loan debt through existing federal student loan forgiveness programs, such as the Student Loan Forgiveness Program. of the public service (PSLF), the defense of the borrower until the refunding and the discharges of total and permanent disability (TPD). ). Additionally, the Biden administration recently extended the federal student loan payment pause until May 1, 2022.
However, millions of Americans who are not eligible for the remission still owe $1.75 trillion in student loan debt, according to the Federal Reserve. And it’s unclear whether President Biden will cancel student loans, though Education Secretary Miguel Cardona said the Department of Education will “continue conversations about…broad loan cancellation.”
In the absence of certainty about the widespread cancellation of student loans, some borrowers could research other debt repayment options, such as student loan refinancing. See if this strategy is right for your financial situation by using Credible’s student loan refinance calculator.
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How to decide if you should refinance your student debt
Student loan refinancing involves taking out a new student loan to pay off your college debt on better terms, such as a lower interest rate. Refinancing your student loans can help you lower your monthly payments, pay off debt faster, and save money on interest over the life of the loan.
That being said, student loan refinancing is not for everyone. Here are some things to consider if you’re considering refinancing:
- Refinancing federal student loans into a private loan makes you ineligible for certain federal protections. This includes income-driven repayment plans, COVID-19 emergency relief, and some student loan forgiveness programs like the PSLF.
- Private student loans are not eligible for federal government protections, so borrowers don’t have to risk as much when refinancing these types of student loans.
- According to data from Credible, student loan refinance rates are currently near all-time lows, meaning borrowers have the option to lock in a lower interest rate on their college debt.
- Private student loan refinance rates are determined by the borrower’s creditworthiness, such as credit score and debt-to-income ratio. Borrowers with fair or bad credit may consider refinancing student loans with a co-signer to get better terms.
- Private student lenders do not charge a refinance fee, which means your interest rate is the only finance charge included in the loan.
Browse current student loan refinance rates from private lenders in the table below and visit Credible to see your estimated rate for free without affecting your credit score. This way you can decide if this debt repayment strategy is right for you.
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