Personal Finance

No Student Loan Cancellation Could Mean These 5 Things

If President Joe Biden doesn’t enact student loan forgiveness, these 5 things could happen instead.

Here’s what you need to know—and what it means for your student loans.

Student Loans

The future of student loan cancellation may depend on a single legal memo from the U.S. Department of Education. Biden is awaiting a legal analysis from Education Secretary Miguel Cardona, which could be completed within weeks. While Biden ultimately may cancel student loans, there are several legal reasons why he won’t be able to enact unilateral student loan cancellation. If Biden doesn’t cancel student loans for all student loan borrowers, here are 5 things that could happen instead:

1. Targeted student loan cancellation

Will your student loans get cancelled? Wide-scale student loan cancellation is looking less likely each day. However, student loan cancellation can still happen, even if every student loan borrower doesn’t get student loan forgiveness. Since becoming president in January, Biden has embarked on a targeted, piecemeal approach to student loan forgiveness. Overall, Biden has cancelled at least $2.3 billion of student loans. (You can learn if you qualify for $2.3 billion of student loan forgiveness here). First, Biden cancelled $1 billion of student loans for 72,000 student loan borrowers and second, he cancelled another $1.3 billion of student loans for 41,000 borrowers with total and permanent disability. America has reacted to Biden’s student loan cancellation in different ways. However, there’s no indication that Biden would stop cancelling student loans even if he decides not to enact wide-scale student loan cancellation. For example, student loan borrowers who were defrauded by their college or university or who face permanent and total disability can still get student loan forgiveness.

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