Can Joe Biden Forgive Student Loan Debt Without Congress? His Campaign Promised To During the election of 2020 President Biden’s campaign website promised to forgive $10,000 per individual of federal student debt, which is not a small promise to make. If he puts that promise into action, it will eliminate the debt of nearly one third of borrowers. Imagine the impact that would have on the economy -- 15 million people free from student loan payments and able to spend their money in the rest of the economy instead. It would certainly be a boon for the housing market as young people are no longer buying homes at the rates that they used to. If 15 million people were free from $10,000 dollars in debt, that’s a lot of down payments mortgages that could be made overnight. \t\t \t\t\tDid you know? Student loan refinance rates are at historical lows\t\t \t\tLowering your interest rate is the easiest way to save on student loan debt. You can also refinance to a shorter term and get out of debt faster.See my savings Takes 2 minutes • No impact on credit But if student loan forgiveness is such a helpful idea, why doesn’t the president make it happen? Well, that’s because it remains unclear if he has the power to do so. Nancy Pelosi, The Speaker of the House, Says That He Can’t The Most Powerful Member of the House of Representatives Says No \t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t The Speaker of the House Nancy Pelosi (D-CA) said in an interview on July 29th of 2021: “The president can’t do it, that’s not even a discussion,” clearly stating her belief that the president is unable to forgive student debt because she believes that only Congress has the ability to forgive federal debt. As the Speaker of the House, she is certainly in a position to make her thoughts on the subject heard. However, it should maybe be taken with a grain of salt that the most powerful person in Congress is proclaiming only Congress has the power to do something that the president can’t. Our system of checks and balances encourages a butting of heads between the three branches of the federal government, so it's not surprising the House Speaker is trying to protect what she believes are powers that are bestowed only to Congress in the language of the Constitution. Congress, specifically the House of Representatives, is granted the so-called “power of the purse.” That means they control the money of the federal government, including how it is raised and how it is spent. So it's clear to see why the house speaker believes only her branch of government can forgive federal student debt. Chuck Schumer, the Senate Majority Leader, Says He Can The Most Powerful Member of the Senate Says It Would Be Easy to Do \t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t The Speaker of the House’s branch of government is bicameral, and so she isn’t the only powerful Congressional leader to make their voice heard on the subject. Chuck Schumer (D-NY) the Senate Majority Leader has also made statements regarding whether or not the president has the power to forgive federal student debt. He, along with some other high-profile Democrats, have pushed the president to go much further than his $10,000 campaign pledge and forgive $50,000 of student debt per borrower as a way to boost the economic recovery coming out of Covid. Freeing up $10,000 per borrower would have a huge impact on the economy, so imagine what $50,000 per student borrower could do for the economy. The majority of those 45 million individuals with federal student loan debt would see their debt disappear, which would free them up to buy houses, start businesses, or even start a family. The Senate Majority Leader has been resoundingly clear on his belief that the president has the ability to forgive not only his campaign promise worth of debt, but the full $50,000 per borrower. He has stated “all the president has to do is flick his pen and sign it,” referring to Biden signing an executive order that would forgive the debt. But Can Biden Really Forgive Student Debt? There Isn’t a Clear Definitive Answer As of Yet \t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t The opinions of the two most powerful members of Congress actually have very little to do with whether or not the president can forgive student loan debt through executive action. The president stated when asked about forgiving $50,000 of student debt that “he would not make that happen” implying that even if it is determined that he has the authority to cancel the debt, he would not do so. Instead, he has called on Congress to take action to cancel his campaign promise worth $10,000 per borrower. Back in April the president did request that the Secretary of Education prepare a memo that would look into his ability to forgive federal student debt through executive action. The results of that memo have either not been gathered yet or not been released yet, so the official determination from the Department of Education is still an unknown. But even if the memo comes back and clearly states that the president has the power to forgive student debt, the president might be unwilling to do so. This is a difficult issue for Biden because his promise to forgive $10,000 in student loan debt was a big promise to his supporters. For the 45 million Americans who are burdened by student loan debt, it may have been a big reason to vote for him. The president is unsure whether he can forgive the debt himself or if he even would, but this approach could cause his voters to become disgruntled. It is unlikely that Congress manages to get anything done considering the current demographics in the Senate. It’s almost evenly split. Congress could try to squeeze student loan forgiveness into a budget reconciliation bill that requires only a simple majority to pass as opposed to the sixty votes that are normally required to pass a bill, but it may not be that simple. With the midterms coming up (yes, believe it or not the midterm season is already starting) it appears that Democrats are using their reconciliation bill to try to do something with infrastructure, which will leave student debt forgiveness out of the equation. And since they won’t be able to get a sixty-vote majority to pass it with a normal bill, Biden's call for Congress to forgive $10,000 in debt may prove difficult. Congress cannot pass a bill to forgive student debt before the midterms. It won’t happen. That is a frustrating reality for everyone out there who believed the president's word when he was on the campaign trail. It may cause future political issues for Joe Biden if he decides to refuse to forgive student debt with a finding that he does in fact have the authority to do so. There are 45 million people with federal student debt, and Biden only received 80 million votes in the last election. If he was playing it smart, Biden would wait until closer to the midterms and then take executive action to forgive student debt and encourage a huge swathe of voters to come out and support his party, the Democrats, in the midterm election. This way he could avoid what usually happens to a president -- midterms shaking up the demographics in Congress -- and actually hold onto the Congress for his entire term in office. Refinancing Your Student Loans to Save Money How to Take Advantage of Biden’s Potential $10k Forgiveness in with Your Loan Refinancing Plan Of course, student loan forgiveness is better than student loan refinancing -- forgiveness knocks down the total amount of money you owe, whereas refinancing helps you adjust your interest rates so that you pay less on the amount you owe over the lifetime of the loan. Right now, student loan interest rates are historically low, which means refinancing your loans through a private lender could save you money long term. If $10,000 in federal student debt forgiveness won’t erase your student loans completely, the best plan of action may be to refinance any leftover federal or privately held student debt to take advantage of these lower rates. You can use Purefy’s award-winning rate comparison tool (that’s right, NerdWallet recognized Purefy as Best Overall Student Loan Refinancing Marketplace in 2021!) to easily compare interest rates from top lenders, refinance your loans, and take full advantage of any student loan forgiveness the Biden administration may grant. So can Biden forgive student debt? The answer is currently unclear. The most powerful members of Congress are on totally opposite sides, and the president himself isn’t even aware if he is able to yet. As far as saving money on student loans goes, right now we can focus on refinancing loans to take advantage of dropping interest rates. But in terms of true debt forgiveness, the best answer we have right now is that Biden promised to forgive student debt, and if he backtracks on that promise, he may be held accountable by the electorate. It is certainly in the president's best interest to forgive federal student debt for straight out political reasons, but as July 2021 draws to a close, there is still no definitive answer if he can or cannot, or even if he will or will not. For now, we’ll have to wait and see.