April 3, 2021

Student Loan Forgiveness Review Could Mean This For Student Loan Cancellation

Student Loan Forgiveness Review Could Mean This For Student Loan Cancellation

President Joe Biden has asked for a legal review of student loans, and here’s what it could mean for student loan cancellation.

Here’s what you need to know.

Student Loans

If you have been following the latest news on student loan cancellation, Biden has asked the U.S. Secretary of Education Miguel Cardona to conduct a legal review of the president’s authority to enact wide-scale student loan cancellation. While the report is not expected for several weeks, the legal review is expected to answer at least one key question: whether the president can unilaterally cancel student loans by executive order without any further congressional authorization. Here is what the memo may say about student loans and student loan cancellation. Let’s explore some key potential scenarios:

1. Only Congress can enact wide-scale student loan cancellation

The first scenario is that the legal review includes the most common-held belief that only Congress (the legislative branch) has the power to decide federal spending. Student loan cancellation is a form of federal spending, and the president (the executive branch) typically cannot initiate new federal spending without proper congressional approval. Biden, a former U.S. senator, has said he doesn’t think he is legally able to enact student loan cancellation by executive order. This is why he has called on Congress to cancel $10,000 of student loans immediately for student loan borrowers.

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