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President Biden Is Reportedly Considering Canceling Student Debt

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

President Joe Biden is now signaling that he is actively considering his options to administer student loan debt cancellation through executive action.

The indicators from the White House follow a meeting on Monday with members of the Congressional Hispanic Caucus, where the president signaled he was willing to continue with the ongoing federal moratorium on student loan repayments and would also consider executive action that could cancel some portion of the debt.

Details of the meeting were first reported by The Washington Post and CBS News and highlighted how the administration was reviewing the available options amid concerns over how canceling student debt could impact inflation.

For now, the pause on federally-held student loan payments and interest accrual remains in effect through August 31. With the congressional midterm campaigns well underway, the administration could be looking to use this new end date as a moment to announce new actions concerning the student loan portfolio.

 

Publication Date: 4/27/2022


Eileen E | 4/27/2022 4:1:39 PM

@James C. I do agree with you about the zero interest rate. There is no way to refinance your federal student loans like a mortgage without losing your federal benefits. Remove the loan fee... it is pain for both students and schools. Hopefully, future presidents do not overturn Biden's executive action for loan forgiveness. If congress did it, it can't be changed. Sadly congress can't work with each other.

Kirsten O | 4/27/2022 2:8:15 PM

Due to the recent admissions from FSA about the struggles of accurate information regarding number of payments student loan borrowers have made, I believe they should give anyone who has been in repayment and satisfied their 10 year public service commitment complete loan forgiveness, regardless of how many payments they have made. Many of us who have been in public service positions make substantially less than we would have in the public sector. I know I took over a 50% cut in pay to have a job, and it just happened to be at a college. Also, there has not been any regular increases to compensation as many colleges put hiring and compensation increases on hold to help support budget cuts.

Sarah B | 4/27/2022 12:46:29 PM

Timothy's comment about FFEL spousal consolidation and PSLF echoes my own concerns. As an FAA, divorced (and remarried) borrower with a joint consolidation, and PSLF-eligible borrower my concerns are both professional and personal. Paying the non-eligible spouse portion of the FFEL loan is not an issue, severability is crucial to be equitable. Congressional representatives are unresponsive to the calls as it is not a hot issue. FFEL borrowers continue to be excluded from many CARES Act and DL benefits, joint FFEL borrowers benefiting the least. The program was ill-advised and continues to trap economically vulnerable students.

Nedi G | 4/27/2022 12:28:14 PM

I would recommend we cancel all the subsidized loans only and move through congress to get it done. Moving forward, eliminate sub loans all together. Replace them with a grant calculated same as sub loabn eligibility. Neediest students get both pell and new grant while middle class non-pell eligible students can get a $3,500 grant. High income folks can continue to get both unsub and PLUS loans.

Michelle C | 4/27/2022 11:34:35 AM

Whatever is done should be done by Congress with a complete overhaul looking at forgiveness as tied to income earnings, PLUS loans for low income families discharged and all the other anomalies mentioned. And no - there's no going backwards for all of us that paid off our loans- this is intended as a collective good since we don't offer free higher education across the board. THAT is a fresh start!

David S | 4/27/2022 10:59:12 AM

The story Timothy S tells illustrates some misleading information everyone was given at the advent of Direct Lending, when schools chose whether to stay with FFEL or go to DL; we were told that the *only* difference between the two were the delivery system. Since then, we've seen countless features that apply to Direct Lending only. Where the blame lies 30 years later is meaningless, but it has to be fixed. You either have a federal student loan or you don't; virtually no borrowers had any reason to know or care if it was FFEL or DL, or if they did know, they have better things to remember years later than obscure acronyms. Congress needs to fix this, but has shown little interest in doing so. We have to keep pushing them.

Kimberly L | 4/27/2022 10:42:38 AM

If student loan debt is cancelled, what would the federal loan program look like going forward? If the "bucket" is emptied, then the "leak" must also be fixed. What changes will be made to the program to prevent unmanageable debt in the future?

Paul L | 4/27/2022 10:14:31 AM

Wouldn't blanket forgiveness completely upend higher education financing? How would one move forward after such an action? I just don't see this as being feasible.

Timothy S | 4/27/2022 9:24:52 AM

Unfortunately, a small group of us who were misled into FFEL Spousal Consolidation Loans right out of college cannot get relief under this action and we cannot consolidate to a Direct Loan to receive PSLF. My wife and I are still married but many couples have since divorced but are still tied to their ex-spouses through this loan. If their spouse doesn't pay, they have to repay it. It was a terrible idea at the time it was created which is why it was cancelled by Congress. Apparently, only Congress can correct the wrong. This particular loan keeps abused spouses tied to their abuser but because there are now less than 800 of these loans remaining, no one cares. It's not enough people for anyone in Congress to take action. The few who have tried, can't get their bills out of committee.

Mark M | 4/27/2022 9:22:20 AM

Considering the Fed's interest rate strategy to slow/lower inflation and the concern of how that could slow spending and trigger a recession, it would seem desirable to enter into such a situation with less debt overall, and manageable terms that loan cancellation and a 0% interest rate on student loans would would accommodate everyone.

James C | 4/27/2022 8:31:51 AM

He should set the interest rate on past and present subsidized loan to 0%. That ensures you are helping students and former students from needier backgrounds. A blanket loan forgiveness helps a lot of higher income families and graduates.

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