A number of prominent Democrats are urging President Biden to cancel student debt using an executive order. (iStock)
Progressive lawmakers are ramping up pressure on President Joe Biden to cancel student debt for millions of federal student loan borrowers using executive action.
Among them is Sen. Elizabeth Warren, D-Mass., who has been outspoken in calling on the president to provide up to $50,000 worth of student loan relief per borrower. Warren is on a number of Senate financial committees focusing on consumer protections and federal regulatory oversight.
"With a stroke of his pen, the President can #CancelStudentDebt and give relief to 40 million Americans, continue our economic recovery, and narrow the racial wealth gap.," Warren said in a Tweet on Tuesday.
Warren isn't the only prominent Senate Democrat who wants the Biden administration to take action on student loan debt. Senate Majority Leader Chuck Schumer, D-N.Y., has called on the president to enact student loan forgiveness dozens of times on Twitter in the past few months.
A number of House Democrats have also urged President Biden to forgive student loans through an executive order on Twitter in the past week, including Reps. Ilhan Omar, D-Minn.; Pramila Jayapal, D-Wash.; and Ayanna Pressley, D-Mass.
- Rep. Pramila Jayapal, D-Wash
Democrats argue that the president should lean on his executive authority to fulfill his campaign promise of forgiving federal student loan debt.
Biden himself has cast doubt on his ability to cancel student debt using his presidential powers, and the White House recently indicated that he was waiting on Congress to enact student loan forgiveness legislation. House Speaker Nancy Pelosi, D-Calif., agrees — she previously said that student debt cancellation "has to be an act of Congress."
Keep reading to learn more about what the Biden administration is doing to provide student loan relief, as well as your alternative college debt repayment options like refinancing. You can compare free student loan refinancing offers on Credible without impacting your credit score.
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Will Biden forgive student loans?
As a presidential candidate, Biden campaigned on forgiving a minimum of $10,000 worth of federal student loan debt per borrower. But a year into his presidency, he's so far been unable to deliver on that promise.
One issue facing the Biden administration is how best to enact student loan forgiveness legislation. While progressives continue to urge the president to cancel student debt using executive action, Biden himself indicated in a February 2021 town hall that he doesn't think he has the legal authority to move this cause forward.
The Higher Education Act of 1965 gives the Secretary of Education the authority to "enforce, pay, compromise, waive, or release any right" to collect on federal student loans, but legal experts are split on whether that includes widespread student loan forgiveness.
Since Biden took office, the Department of Education has forgiven $11.5 billion worth of student loan debt through existing federal student loan forgiveness programs, such as the Public Service Loan Forgiveness program (PSLF), borrower defense to repayment and total and permanent disability discharges (TPD). Plus, the Biden administration recently extended the federal student loan payment pause through May 1, 2022.
However, millions of Americans who aren't eligible for forgiveness still owe $1.75 trillion worth of student loan debt, according to the Federal Reserve. And it's unclear whether President Biden will forgive student loans, although Education Secretary Miguel Cardona has said that the Education Department is "going to continue conversations around… broad loan forgiveness."
With no certainty around widespread student loan cancellation, some borrowers may seek alternative debt repayment options like student loan refinancing. See if this strategy is right for your financial situation by using Credible's student loan refinance calculator.
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How to decide if you should refinance your student debt
Student loan refinancing is when you take out a new student loan to repay your college debt on better terms, such as a lower interest rate. Refinancing your student loans may help you reduce your monthly payments, pay off your debt faster and save money on interest over the life of the loan.
That being said, student loan refinancing isn't right for everyone. Here are a few things to consider if you're thinking about refinancing:
- Refinancing federal student loans into a private loan makes you ineligible for certain federal protections. That includes income-driven repayment plans, COVID-19 emergency relief and select student loan forgiveness programs like PSLF.
- Private student loans aren't eligible for federal government protections, so borrowers don't have as much to risk by refinancing this type of student loans.
- Student loan refinance rates are currently near historic lows, according to data from Credible, which means that borrowers have the potential to lock in a lower interest rate on their college debt.
- Private student loan refinance rates are determined by a borrower's creditworthiness, such as credit score and debt-to-income ratio. Borrowers with fair or bad credit may consider refinancing student loans with a cosigner to lock in better terms.
- Private student loan lenders don't charge fees for refinancing, which means that your interest rate is the only financing charge included in the loan.
Browse current student loan refinancing rates from private lenders in the table below, and visit Credible to see your estimated rate for free without impacting your credit score. That way, you can decide if this debt repayment strategy is right for you.
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