4 takeaways for student borrowers after Biden’s big speech
Last night, President Biden delivered his first State of the Union address to a joint session of Congress. Biden focused his speech on three major crises affecting the nation – Russia’s invasion of Ukraine (and the response of the United States and its allies), the Covid-19 pandemic and rising inflation. .
But Biden did not mention student loan relief, an issue that affects more than 40 million Americans, during his hour-long speech. Here’s what that means for borrowers.
Biden does not expect Congress to act on student loan forgiveness
Biden went through a long list of legislative initiatives he hopes Congress will pass in the coming months, including economic aid, increased domestic manufacturing and production, and the right to vote. He asked Congress to pass a series of specific bills. But he did not ask Congress to pass student loan relief legislation.
This matters because White House officials have repeatedly dodged questions about whether Biden would enact a sweeping student loan forgiveness through executive action alone. Biden has expressed uncertainty about whether he has sufficient legal authority to act unilaterally to cancel student debt, but administration officials have consistently said he will sign a loan forgiveness bill into law. students passed by Congress. But no such bill appears to be forthcoming, and the president’s failure to ask Congress to pass a student loan forgiveness bill may be an acknowledgment that such legislation will not be forthcoming. a priority for congressional Democrats, who hold only narrow majorities in both the House and Senate. If Congress does not pass the student loan forgiveness legislation, executive action may be the only path to further relief.
Biden didn’t mention student loan forgiveness or other student loan relief — at all
By excluding student loans entirely from his speech, Biden didn’t even tout the relief that has already been given to borrowers under his administration, though he praised his other accomplishments over the past year, including the adoption of the US bailout and bipartisan infrastructure. Law. In the past, the Department of Education approved more than $16 billion in student loan forgiveness and expanded relief under existing federal loan programs, including the Civil Service Loan Forgiveness . Biden also extended the current pause on most federal student loan payments and interest, saving borrowers billions more.
But Biden also did not offer the prospect of further student loan relief during his speech, such as another extension of the student loan pause or additional student loan forgiveness initiatives.
Lawyers weren’t happy with Biden’s failure to discuss student loans
Advocates for student borrowers who have engaged in an ongoing campaign to persuade President Biden to pass sweeping relief, including the mass cancellation of student loans, were unhappy that his speech excluded student loans.
“We remain hopeful that President Biden would acknowledge the $1.7 trillion student debt crisis affecting more than 45 million Americans – we are disappointed that he has not,” Student Debt said. Crisis, a borrower advocacy organization, in a statement. “The cost of education and the enormous debt burdening American families remains one of the most difficult economic issues of our time.”
“President Biden’s failure to settle costly student loan debt tonight reflects his administration’s paltry efforts on the nearly $2 trillion crisis since taking office,” said Braxton Brewington, spokesperson for the Debt Collective – a debtors’ union that defends borrowers – in a statement.
‘Encouraged by @POTUS’ [State of the Union speech] & ready to keep fighting to build a better America. It’s high time to… #CancelStudentDebt,” Rep. Ayanna Pressley (D-MA) said in a tweet after Biden’s speech. Pressley has been one of the most outspoken members of Congress calling on Biden to take aggressive action on student loans, including enacting widespread forgiveness through executive action.
Uncertainty remains over further student loan relief
Although Biden didn’t discuss student loans during his speech, that doesn’t necessarily mean he closed the door on further relief. But great uncertainty remains.
For now, all signs point to federal student loan payments and interest picking up after May 1, the expiration date of Biden’s most recent extension. Still, administration officials have been careful not to call this latest extension “final,” as they did with last year’s extension — an acknowledgment that factors beyond their control may necessitate. additional relief.
And while Biden has made it clear he has no intention of wiping out everyone’s student loan debt, the administration has hinted that additional “targeted” relief may be on the way as the Department of Education is looking at additional ways to modify existing programs and expand eligibility. The administration may also consider other mechanisms to provide relief to borrowers as well, such as relaxing some bankruptcy restrictions, cracking down on misconducting loan companies, and simplifying the loan administration system.
Borrower advocates have argued that the administration’s actions so far fall far short of what is needed to have a meaningful impact on borrowers. It remains to be seen whether Biden will enact more sweeping changes.
Further Reading on Student Loans
Thousands of Jobs Qualify for Expanded Student Loan Forgiveness Program
Is Biden extending student loan pause beyond May? It’s a little complicated.
Biden’s student loan forgiveness now tops $16 billion after fresh wave of approvals
One Million Borrowers Could Get Expanded Student Loan Forgiveness Starting This Month, Biden Official Says