President Joe Biden has said he supports canceling $10,000 in student loans per borrower.
Facing pressure from other Democrats, progressives and borrowers, Biden has now also asked his Education secretary to prepare a memo on his legal authority to wipe out as much as $50,000 each for all.
“I think the odds of some student loan forgiveness being enacted is as good as it has ever been,” said higher education expert Mark Kantrowitz.
Still, nothing is certain, and many borrowers have a lot of questions while they wait to learn the fate of their debt, which can impact everything from when and if they’re able to buy a home to the careers they pursue.
Here are some answers, based on what we know at the moment.
When could forgiveness happen?
If Biden chooses to cancel the debt through executive action, in theory borrowers could see their balances reduced or eliminated pretty quickly. But such a move may be met by court challenges, which could lead to delays.
A clearer picture may soon emerge.
“If Biden decides he can do it via executive order, I expect we’ll hear about it by June or July,” said Betsy Mayotte, president of The Institute of Student Loan Advisors.
If the White House opts to leave student loan forgiveness to Congress, Democrats would likely use the budget reconciliation process to get it done.
That’s because that process allows them to pass legislation with a simple majority, which is all they have. Other bills typically must garner 60 votes to advance, thanks to Senate procedural rules. Republicans are largely hostile toward the idea of a student debt jubilee.
The next budget reconciliation process will likely be in the fall.
Can I count on my student loans being forgiven?
Although the odds of student loan borrowers getting their balances reduced or eliminated have never been greater, “until legislation is signed into law, you can’t count on anything,” Kantrowitz said.
Currently, there are pending reports from the U.S. Department of Education and the Justice Department on whether the president has the legal authority to implement loan forgiveness through executive action, Kantrowitz said. It’s still unclear when the findings will be published.
In the meantime, he added, “borrowers should not take any precipitous action in anticipation of loan forgiveness.”
How much could be forgiven?
At the moment, the main point of contention among student loan forgiveness proponents is over how much debt should be scrapped: $10,000 or $50,000.
If all federal student loan borrowers got $10,000 of their debt forgiven, the outstanding education debt in the country would fall to around $1.3 trillion, from $1.7 trillion, according to Kantrowitz. And roughly one-third of federal student loan borrowers, or 15 million people, would see their balances reset to zero.