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President Joe Biden has requested a legal assessment of student loans, and here’s what it could require for student loan cancellation.

Student Loans

When Biden got the latest news about the cancellation of student loans, Biden asked the U.S. Secretary of Education Miguel Cardona to review the president’s enactment of large-scale student loan cancellation rights. It is thought that there will be no reports within a few weeks. But the statutory audit needs to answer at least one important question. Whether the president can independently cancel student loans through an administrative order without the permission of Congress. The reminder for student loans and student loan cancellations is as follows: Let us discover some of the main potential options.

Only Congress can authorize large-size student loan cancellation

First, statutory audits contain a more general notion that only Congress (the legislature) can decide federal expenditures. The cancellation of student loans is a form of federal expenditure. But the president (administrative agency) usually cannot start new federal spending without parliamentary authorization. Former U.S. Senator Joe Biden said he believes that the executive order to cancel student loans is illegal. This is why he asked Congress to cancel the $10,000 student loan for borrowers immediately.

Yes, you can cancel student loans by administrative order

The second case is that the statutory review supports Senator Elizabeth-Warren (D-MA), Senator Chuck Schumer (D-NY), and others. It is a student loan and does not require more congressional approval. Section 432(a) of the Higher Education Act of 1965 authorizes Schumer and Warren to “change, infringe, waive or grant the rights, titles, requirements, privileges or requirements of the United States Secretary of Education”. Legally, Schumer and Warren have a dispute. The president can cancel student loans to all student borrowers (through the Secretary of Education) by executing an order. If this happens, Congress may even cancel student loans multiple times. Biden will cancel student loans of up to $50,000 by the presidential decree. But they plan to only cancel federal student loans for borrowers with an annual income of less than $125,000. Biden has not actively considered cancelling student loans of $50,000.

Yes, you can cease student loans if Congress approves

The third situation is that the president has the legal power to cancel student loans through administrative orders. But the legal statement states that Congress’s additional permission is required. Schumar and Warren oppose this prospective decision. But they hope that the Higher Education Act of 1965 may not foresee the U.S. Secretary of Education’s decision to cancel millions of student loans. There are several purposes why student loan cancellations are not allowed:

In 1965, Congress was unlikely to realize that 45 million student borrowers should borrow a total of $1.7 trillion in student loans.

Parliament, an agency equivalent to the government, is unlikely to individually authorize the government to spend unlimited taxpayer funds to cancel student loans.

The “Higher Education Law” does not mention “forgiveness for unlimited student loans” or other equivalent forms, indicating that the law allows all student loan debts to be legal.

These words are not required, but legal scholars can discuss the potential intent of Congress in drafting the law, rather than just reciting the script. But the Ministry of Education reaches this assumption, Congress can authorize the president, and Biden can cancel student loans under an executive order.


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The president can legislate at least some student loan cancellations

The fourth situation is that the statutory notice stipulates that the president can cancel student loans for certain borrowers under limited circumstances. For example, Biden canceled a $2.3 billion student loan last month. First, Biden cancelled $1 billion in student loans for 72,000 student loan borrowers and then cancelled $1.3 billion in student loans for 41,000 borrowers with total and permanent disabilities. Therefore, Biden has the right to amortize at least part of the student loan debt of the selected group of borrowers. The question is how far the government will go, and the number of student borrowers who can obtain student loan permits through administrative orders is limited.

Next Steps: Student Loan Cancellation 

Ron Klain (White House Chief of Staff) said that when Biden received the student loan repayment notice. “He will investigate its legal authorization. He will analyze political issues and make decisions in this regard.” However, the legal statement is not binding law.

Instead, the memorandum is based on the recommendations of the Ministry of Education’s legal analysis. The Trump administration has written a legal notice stating that the president cannot individually cancel large student loans through an administrative order. In other words, Biden’s education department may come to another conclusion. Therefore, Biden decides whether to cancel student loans and so on.

Although you have no legal authority, you can maintain your current position to sign the Student Loan Repayment Act passed by Congress. Will my student loan be cancelled? Eventually, it depends on the president and parliament. When you think of student loan repayment options, consider the following wise options to save money:

  • Public service loan remission (student loan forgiveness for federal loans)
  • Income-driven repayment programs (lower monthly payment for federal loans)
  • Student loan refinancing (lower monthly, lower interest rate payment)

Feel free to contact us to get help in your student loan forgiveness we will take care of every aspect from document preparation to loan forgiveness.

Zainab Farrukh

Zainab Farrukh

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SLFA is a private company and does not claim to be affiliated with any Federal, State, or Local Government agencies. People with student loan debt have the legal right to use an attorney or process federal student loan documentation on their own behalf without paid assistance. Our mission is to provide people with the credit repair, knowledge, information, and document preparation service they need to deal with all the financial decisions to find what they need and return to life effortlessly.

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