What Biden’s Budget Means for Your Student Loans
This story is developing.
President Joe Biden released his new annual budget today.
Here’s what you need to know – and what it means for your student loans.
Biden today released a $ 6 trillion budget proposal for fiscal year 2022. There are several important implications for student loans, including, but not limited to:
1. Student loan cancellation fell from Biden’s budget
As expected, Biden didn’t include any student loan cancellations in his new budget. This is another major setback for student loan cancellation, as Biden has not included any student loan cancellations in the latest stimulus packages or infrastructure package. Why was student loan cancellation excluded? One possible reason is that the annual budget only contains major policy plans that have already been released by the Biden administration. Biden has not officially declared that he will not pass the cancellation of student loans, but it is increasingly clear that the potential for unilateral and large-scale cancellation of student loans by the president is unlikely. That said, Biden is awaiting a legal analysis from the US Department of Education to determine whether the president has the legal authority to enact student loan cancellation without further authorization from Congress. Therefore, it is possible that Biden decided not to include the student loan cancellation in his budget because the Department of Education did not release his findings.
2. Increased Pell Grants to Make University More Affordable
Biden’s budget would increase the Pell Maximum Grant by $ 400, which is on top of the $ 1,475 increase in Pell Grants in the US Plan for Families. The goal of increasing the Pell Grants is to make the university more affordable and to reduce the amount of student loans that a borrower would need to borrow. This represents the largest one-time increase since 2009 and is part of the President’s plan to double the size of Pell Grants. Pell grants are particularly useful for low-income students to fund higher education. An increase in Pell Grants means that eligible student loan borrowers would have to borrow fewer student loans, which could save those borrowers money. Separately, Senator Bernie Sanders called for the largest student loan cancellation and free college plan in history. Like Biden, Sanders wants public four-year colleges and universities as well as community colleges to be free. Another possibility of reducing student loan debt is that colleges and universities are considering a three-year college education instead of four years.
3. Increase equity in higher education
Biden has a particular focus on increasing equity in higher education. Its budget would increase funding for science and engineering programs that increase the participation of under-represented groups. The funding would help support “program design, research into successful recruitment and retention methods, the development of outreach or mentorship programs, scholarships and scientific capacity building, engineering research and education. At historically black universities and colleges (HBCUs) and other minorities. Establishments at the service (MSI). Sanders, Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) all said that an effective way to increase equity in higher education is to write off debt. student loans.
Student loan cancellation: next steps
Will your student loans be canceled? Based on the latest news, it is increasingly likely that there will be no student loan cancellations from the President or Congress. Despite excluding student loan cancellation from this latest budget proposal, Biden could still cancel student loans through executive order. This begs the question: do you have to wait for student loan cancellation? Make sure you understand all of your student loan forgiveness and student loan repayment options. This is especially important since federal student loan repayments are expected to resume on October 1, 2021. Here are some possible options to consider: