If you’re looking for student loan cancellation in President Joe Biden’s Build Back Better plan, you won’t find it.
Here’s what you need to know.
The Build Back Better plan — Biden’s economic and social plan in the aftermath of the Covid-19 pandemic — was cut from $3.5 trillion to $1.75 trillion. Both before and after reducing the legislative package, you won’t find any mention of wide-scale student loan cancellation. Not from the president. Not from Congress. At the same time, there has been no shortage of rhetoric in recent weeks about the need to cancel student loans and to cancel student debt now:
“President Biden can cancel student loan debt with ‘the flick of a pen.’” — Senate Majority Leader Chuck Schumer (D-NY)
“We don’t actually have to do anything in Congress. The president of the United States has the power to cancel student loan debt on his own.” — Sen. Elizabeth Warren (D-MA)
“We know the President can do it with the stroke of a pen…Cancel student debt.” — Rep. Ilhan Omar (D-MN) told Business Insider.
“…[T]here is more opportunity than ever to bring the heat on Biden to cancel student loans…he needs to step up his executive action game and show his commitment to deliver for people.” — Rep. Alexandria Ocasio-Cortez (D-NY) on Instagram.
Student loans: where is student loan forgiveness?
For all the rhetoric about student loan cancellation and how essential it is to provide student loan relief to struggling student loan borrowers, you won’t find any wide-scale student loan cancellation anywhere in any major legislation. (Student loan forgiveness isn’t available to everyone, but this plan is available now). It wasn’t in the first stimulus package. It wasn’t in the second stimulus package. It wasn’t in the president’s budget. It wasn’t in the infrastructure bill. It’s not in the Build Back Better plan. Democrats control the White House, U.S. Senate and U.S. House of Representatives. It’s a unique triumvirate of political power. Yes, it’s a 51-50 majority in the U.S. Senate, with Vice President Kamala Harris able to break tie votes. However, Democrats get to control the political and policy agenda. Speaker of the House Nancy Pelosi (D-CA) and Schumer get to control the legislative agenda. However, despite controlling Congress and the White House, Democrats repeatedly have decided not to focus on student loan cancellation. (Here’s who qualifies for student loan forgiveness right now). When given opportunities to advance legislation on providing comprehensive student loan relief as they’ve promised from behind the podium, they have actively decided not to. Their rhetoric doesn’t match their action. (These student loan borrowers won’t qualify for student loan forgiveness).
Student loan forgiveness: rhetoric vs. reality
Despite this power to focus on important issues, Congress has repeatedly chosen not to pass any student loan cancellation whatsoever. Instead, they’ve waged an intraparty war between progressives and the president over an issue — student loan forgiveness — that the president has actively supported more than any other president in U.S. history. Yes, the approach and amount of student loan cancellation are not what progressives in Congress want. (Here’s who qualifies for student loan forgiveness right now).
- Biden has preferred targeted student loan cancellation; progressives want wide-scale student loan cancellation.
- Biden would support up to $10,000 of wide-scale student loan cancellation per eligible borrower; progressives want up to $50,000 of student loan cancellation per eligible borrower.
- Biden wants Congress to pass legislation, which he said he would gladly sign; progressives want Biden to sign an executive order.
- Biden doesn’t think he has executive authority to cancel everyone’s student debt; progressives say he can do so with the “flick of a pen.”
During negotiations on the Build Back Better plan, Democrats have fought for a slew of social programs — free community college, expansion of the child tax credit, universal preschool and many other priorities. However, nowhere in that long list of an economic and social agenda will you find any mention of student loan forgiveness. (How to get approved for student loan forgiveness). If student loan forgiveness is such a high priority, you would think progressives in Congress would refuse to vote for the Build Back Better plan unless student loan forgiveness up to $50,000 were included in the legislation. Has that happened? No. Instead, progressives have focused on one strategy: pressure Biden to cancel student loans through an executive order. For his credit, Biden has cancelled more than $11.5 billion of student loans, including $4.5 billion for public servants, $5.8 billion for student loan borrowers with a total and permanent disability, and $1.5 billion for student loan borrowers who were misled by their college or university. Biden announced major changes to student loan forgiveness earlier this month. In contrast, Schumer hasn’t held a vote in the U.S. Senate on wide-scale student loan forgiveness. Why? Congress can’t pass student loan forgiveness. Republicans don’t support it and many Democrats don’t either.
Student loans: next steps
Student loan relief from the Covid-19 pandemic is ending January 31, 2022. Don’t expect Congress or the president to announce any mass student loan forgiveness before then, or anytime soon. Student loan payments will resume starting February 1, 2022. If progressives in Congress want student loan forgiveness, they should either find a way to pass legislation. Or, they should focus on working within their party and across party lines to find a bipartisan solution to help college students and their families address the cost of higher education. (This could be even bigger than student loan cancellation). High tuition doesn’t discriminate across party lines. Members of both parties want to help Americans live prosperously. Rather than intraparty fighting, Democrats can act on their rhetoric and deliver impact to the communities who are affected most.
With the end of student loan relief, make sure you understand these popular ways to save money with your student loans: