Ilhan Omar, AOC, other progressive lawmakers pressure Biden to issue student loan forgiveness note
A group of progressive lawmakers, including Reps Ilhan Omar (D-Minn.) And Alexandria Ocasio-Cortez (DN.Y.), are pushing the Biden administration to release an Education Department memo outlining the legal authority of the president to cancel student loan debt.
The Biden administration said in April that it requested the memo from Education Secretary Miguel Cardona. White House Chief of Staff Ron Klain said at the time it would be released in a few weeks, but six months have passed since then, according to the letter from progressive lawmakers sent late last week.
Now they are urging its release by October 22 to “determine the extent of the administration’s power to largely cancel student debt through administrative action.”
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The letter also urges President Joe Biden to write off student debt with a “stroke of the pen,” in what has become a joint statement among progressives who say the president has the power to write off federal student loans.
“Decades ago, Congress voted to allow the executive branch to cancel federal student loans,” the letter reads. “This authority is already in use, as it is currently being used to write off interest owed on all student loans held by the federal government. Now is the time for you to honor your campaign pledge and use this authority to cancel all student loans. student debt. “
The letter quotes Harvard Law scholars and 80 members of Congress who confirm that the president can write off student debt through the Higher Education Act. But not all lawmakers agree on the president’s power to cancel student loans. And it’s still unclear whether President Biden will pass sweeping student loan cancellation legislation.
Read on to learn more about the likelihood of student debt relief and how you can reduce your student debt, including alternative debt cancellation programs and private student loan refinancing. If you do decide to refinance your student loan debt, be sure to compare the offers of several lenders on Credible’s online marketplace, all without affecting your credit score.
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Will Biden cancel student loan debt with an executive order?
The Biden administration has written off nearly $ 10 billion in student loan debt since January, affecting borrowers eligible for programs such as borrower defense against repayment, total and permanent disability (PDT) releases, and debt relief. releases from closed schools. The Ministry of Education has also made it easier for 550,000 debtors to qualify for the Public Service Loan Remission (PSLF).
But the widespread cancellation of student loans may be more difficult for the administration to achieve. Biden himself had previously not supported sweeping student loan cancellation proposals. And House Speaker Nancy Pelosi (D-Calif.) Also said that student loan debt cancellation “must be a law of Congress.”
That doesn’t align with what many of his fellow Democrats, including Senate Majority Leader Chuck Schumer (DN.Y.) and Senator Elizabeth Warren (D-Mass.), Have said in the past.
“In fact, we have nothing to do in Congress. The President of the United States has the power to write off student loan debt himself.”
The likelihood of a large-scale student loan forgiveness remains unknown, although progressives may continue to step up the pressure on the president as the federal forbearance deadline draws near at the end of January 2022.
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How to Reduce Your Student Loan Debt When Payments Should Resume
The $ 1.7 trillion in student debt is a financial burden on student loan borrowers, who may have had to postpone other financial steps like buying a home or saving for retirement in order to manage their loan balances. And with federal student loan payments resuming in February 2022, borrowers have little time to get their finances in order.
Private and federal student loan borrowers should consider a few ways to reduce their debt before the COVID-19 administrative forbearance period expires.
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1. Refinance at a lower interest rate
Refinancing a student loan involves taking out a new loan to pay off your current debt on better terms. By consolidating and refinancing at a lower student loan rate, it is possible to lower your monthly payments or pay off your debt faster.
A recent analysis from Credible found that borrowers who refinanced a longer-term loan could reduce their monthly payments by more than $ 250 on average, all without increasing the total cost of interest over time. Those who refinanced a shorter-term loan were able to pay off their loans 41 months faster and save almost $ 17,000 over the life of the loan.
In addition, student loan rates are near their historic lows, according to data from Credible. You can see the fixed and variable interest rates offered by real private student lenders in the table below.
Refinancing a student loan may give you a lower interest rate, but it is not just for everyone. Refinancing your federal student loans into a private student loan would make you ineligible for certain federal protections, including income-tested repayment plans and student loan forgiveness programs.
If you decide refinancing is right for you, compare the rates of several lenders at once in Credible’s online market. Then use a student loan refinance calculator to determine your estimated savings.
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2. Look for other student loan exemption programs
Widespread student loan cancellation may still be out of reach, but there are many college debt cancellation programs you may be eligible for. Here are just a few:
- The Public service loan remission program. Full-time public servants, such as federal employees and nonprofit workers, may be eligible to pay off the remainder of their federal student loan debt after making 120 qualifying consecutive payments or 10 years of payments.
- The Teacher loan waiver program. Teachers who spend at least five consecutive academic years teaching in a low-income school may be eligible for the forgiveness of a portion of their federal student loan debt.
- Repayment of the military student loan. All branches of the military offer their own unique student loan waiver program. For example, the army offer up to $ 65,000 college loan repayment for active duty military service members who meet certain eligibility requirements.
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3. Make more than the minimum payment
Student loans are like any other type of fixed rate loan – the longer the loan term, the more interest you will pay over time. By paying more than the minimum amount required on your federal loans, you can save money in the long run while paying off your loans faster.
You can use Credible’s student loan calculator to see how changing your payment amount can reduce the cost of borrowing over time.
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