Biden's Annual Budget Reportedly Won't Include Forgiveness of Student Loan Debt

Student loan debt forgiveness will reportedly not be in President Biden's annual budget during it's expected finalization by the end of next week.

President Biden

Image via Getty/Anna Moneymaker

President Biden

President Biden’s latest budget will reportedly not include forgiveness for student loan debt.

In previous news on the combination of Biden and student loans, the then-presidential-candidate had campaigned on his support of wiping out $10,000 of undergrad/grad student debt per year of national or community service, up to five years and $50K. After winning the election he’s been pressured by House and Senate Democrats to use an executive order to “broadly” absolve up to $50,000 of federal debt.

He’s since reiterated his support to forgive $10,000 of debt, but has stated he prefers Congress to put together the legislation to do so. Worth noting is that no wide-scale student debt cancellation was included in the president’s infrastructure or stimulus packages. 

Fast forward to this past Friday, and The Washington Post reported that many of Biden’s “ambitious” campaign promises are unlikely to be in his annual White House budget. One of those “ambitious” promises is student debt forgiveness. His administration is reportedly looking into federal student loan relief, though it’s doing so separately. 

CNBC, citing “higher education expert” Mark Kantrowitz, says this budget news isn’t surprising. Kantrowitz instead advises interested parties to pay attention to a memo requested by the president on using his executive authority to call off student loans. He explained why.

“President Biden is still waiting for the U.S. Department of Justice and the U.S. Department of Education to report on their review of his legal authority to forgive student loan debt through executive order,” Kantrowitz said. “Only after he receives that report, which I expect will find that he does not have the legal authority, will the ball be in Congress’ court.”

A(nother) person with knowledge on the subject quoted by CNBC, The National Consumer Law Center’s Student Loan Borrower Assistance Project’s director (mouthful), Persis Yu, is more hopeful that the memo will back Biden’s ability to use his executive authority to issue student loan forgiveness. 

“We are confident that this review will reach the same conclusion that we have reached: that the President already has the authority to provide widespread student debt cancellation with the stroke of a pen,” Yu said. 

Both Presidents Biden and Trump used their authority to pause student loan payments in response to COVID-19-induced economic hardships. That pause is set to expire on October 1. 

Biden’s annual budget is expected to be finalized by the end of next week.

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