A recent report indicates that Biden’s plan for student loan forgiveness could expose the White House to lawsuits. It could also leave some level of debt for borrowers and complicate the president’s authority to cancel federal student loan debt. Despite his support for the idea, many borrowers are skeptical about the new plan. Despite the concerns, it seems like a step in the right direction. But a lot depends on whether it passes the Senate.
Biden’s decision on student loan forgiveness could open the White House to lawsuits
If the Obama administration passes a bill to forgive more than $10,000 of student debt, the decision could open the White House to a range of lawsuits. The Obama administration has been talking about forgiving more than $10,000 of student debt to Pell Grant recipients, and this is one of the variables Biden considered. However, many advocates believe the White House is intentionally dragging its feet.
They point out that the current majority of Democrats in Congress is likely to be reduced next year, so a massive student loan forgiveness program could risk opening the White House to lawsuits.
Democrats and progressives have been pressuring the president to extend the current pause in student loan repayment until December 2022. The extension of the pause could be a boost for the Democratic Party after the November midterm elections, which may also boost the party’s popularity among young voters. Biden and his top White House aides have also considered expanding the current forgiveness to include more loans for low-income borrowers. But it’s unclear if Biden will take such action.
It could leave some level of debt for borrowers
A large scale cancellation of student loans has been seen as a possible political win for Democrats in the 2020 election, but a recent poll showed that more than half of Americans disapprove of President Obama. Republicans fear that such a move could lead to lawsuits, and they have argued that the president doesn’t have the authority to cancel the debt.
In addition, Congress has never granted a president the authority to do so, which could open the White House to lawsuits.
In order to boost his chances of becoming president, Joe Biden is expected to announce a plan to cancel federal student loans. It is widely believed that a program would eliminate as much as $10,000 per borrower, which would help alleviate the disproportionate impact of debt on low-income students. Whether this proposal will be implemented or not is yet to be seen, but it is a good start.
It could complicate his authority to cancel federal student loan debt
While many progressive Democrats have pushed for broad loan forgiveness, skeptics say that the vice president will be more restrained in his approach. Instead of granting unlimited forgiveness, he may opt to limit relief to a certain amount and the income level below which borrowers qualify.
President Obama vetoed a proposal to wipe out up to $50,000 of student debt but has signaled support for a per-person limit of $10,000. However, limiting the forgiveness program to this size would likely alienate his core supporters and the 43.4 million Americans with federal student debt.
The bipartisan Senate is also divided on Biden’s plan. Some favor resuming loan payments, while others say the cancellations will do little to stop the rise in inflation. Opponents of the plan say that this approach will dampen the rise in inflation, but this is only a temporary counterbalance. If you’re in the position to apply for student loan forgiveness, you should know exactly what it entails.