Finally! Glimmers of Hope for Student Debt Cancellation in 2022
On Monday it was announced that Richard Cordray has been appointed to lead the Education Department’s Office of Federal Student Aid. Previously, he was at the helm of the Consumer Financial Protection Bureau (CFPB) from 2012 through 2017.
Cordray is an ally of Senator Elizabeth Warren, who has been a vocal advocate of broad-based student loan cancellation. Warren has argued that the President has the authority to unilaterally cancel student loans and has been pushing for him to forgive up to $50,000 in debt per borrower. If this passes, 36 million borrowers would see their entire loan balances erased completely based on current DOE (Department of Education) data.
After Cordray’s selection, which Warren had pushed for, she stated that Cordray would “apply his fearlessness and expertise to protecting student loan borrowers” and would bring “much needed accountability to the federal student loan program.”
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It is still possible that Biden will not cancel your student loansWhen Will Payments Resume?Another Payment Extension?Political pressure is being applied to have student debt forgiven.
It is still possible that Biden will not cancel your student loans.
But this does not mean that he does not want your student loans cancelled. Progressives have pushed the President to cancel debt by Executive Order, but Biden has repeatedly stated that he is open to legislative student debt cancellation of $10,000 per borrower through Congressional action. And there are other possible options that could occur as well.
When Will Payments Resume?
In addition to discussions regarding cancellation, a more immediate challenge facing Cordray is deciding when to resume monthly student loan payments. Since March of 2020, 40 million Americans have had payments and accrued interest paused due to the global Covid-19 pandemic. In January 2021, Biden has extended the pause until December 31, 2022, and U.S. Secretary of Education Miguel Cardona suggested in statements made on May 3rd that the current pause on most federal student loan payments could potentially be extended beyond August.. But he also made clear that the administration is planning on student loan payments resuming in October.
But this does not mean that he does not want your student loans cancelled. Progressives have pushed the President to cancel debt by Executive Order, but Biden has repeatedly stated that he is open to legislative student debt cancellation of $10,000 per borrower through Congressional action. And there are other possible options that could occur as well.
Another Payment Extension?
Cardona has responded to questions multiple times recently, “”I don’t have any information now to share with you about when it would end or what the conversations are about when it’s going to be lifted,” Cardona said. “I know we have a date, and it could be that it’s extended. Or it could be that it starts there. But what I will say is that our borrowers will have ample notice.”
For more than two years, federal student loan payments have been suspended, and discussions about student loan forgiveness have yet to materialize for the vast majority of Americans. While no official decisions on widespread student loan forgiveness have been made yet, it is feasible that the payment freeze will be prolonged beyond September.
In answer to a question from New Hampshire Senator Jeanne Shaheen, Secretary of Education Miguel Cardona testified in a Senate subcommittee hearing on Tuesday, suggesting that a student loan moratorium extension is still a possibility.
Political pressure is being applied to have student debt forgiven.
The Biden administration’s latest — and largest — step to eliminate federal student loan debt for borrowers who were misled by for-profit colleges was announced on Wednesday. The administration has also made debt relief more accessible to permanently disabled borrowers and public sector employees.
The recent notification takes the total amount of student loan debt cancellations allowed by the Biden administration since January 2021 to $25 billion. President Joe Biden has also repeatedly prolonged the pandemic-related payment hold, most recently extending it from May 1 to August 31.
However, many other Democrats have been pushing on Biden to cancel up to $50,000 of student loan debt for each of the 43 million students, and the administration’s piecemeal approach has disappointed them.
Biden has so far resisted the pressure, but he has stated that he is willing to forgive some federal student loan debt. As a response to the pandemic, he proposed canceling at least $10,000 in student debt for everyone, as well as cancelling all undergraduate tuition-related federal student debt from two- and four-year public schools and universities for borrowers earning up to $125,000 per year on the campaign trail.
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Article References – https://www.forbes.com/sites/shaharziv/2021/05/04/a-new-glimmer-of-hope-emerges-for-student-loan-cancellation-richard-cordray