Student loan forgiveness? Here’s where the United States stands

(NEXSTAR) — For more than two years, most federal student loan borrowers have not had to make monthly payments after Trump and Biden enacted pauses in response to the COVID-19 pandemic. Now that payments start (maybe) again in May, many are hoping their loans will be forgiven instead.

A recent analysis found nearly $200 billion was saved by student borrowers under the repayment freeze, The Hill Reportsbut those borrowers could struggle when the break lifts.

Although borrowers “will likely face a healthier economy in the future, direct loan holders have higher debt balances, lower credit scores, and were making less repayment progress than…before the pandemic,” the researchers wrote. The average student debt balance now exceeds $37,000the Americans in front about $1.6 trillion to the government.

On Thursday, 96 lawmakers — 21 senators and 75 House members — sent a letter to President Biden, calling on him not just to extend the moratorium on payments, but to “cancel student debt now.”

“Cancelling a significant amount of student debt will provide long-term benefits to individuals and the economy, helping families buy their first home, open a small business or invest in their retirement. More broadly, canceling student debt would add tens of billions of dollars to GDP growth,” the letter reads.

Does Biden have the power to cancel student loans?

While he and Trump had the power to freeze student loan repayments, it’s unclear whether Biden has the power to cancel loans.

House Speaker Nancy Pelosi said Biden has no legal authority. Instead, she said, “That would be an act of Congress.” Senate Majority Leader Chuck Schumer, meanwhile, argued that Biden could, under the same legal provision Trump used to delay payments and interest accrual early in the pandemic, The Hill Reports.

Earlier this year, White House press secretary Jen Psaki noted“We are still looking at administrative options, but Congress can also send the president a bill that would provide $10,000 in debt relief, and he would be happy to sign that bill.”

In addition to calling on Biden to forgive over $50,000 in student debt per borrower, legislators are considering several legislative proposals to cancel student loans, facilitate refinancing, or continue pausing payments.

Who is already eligible for student loan forgiveness?

Whether or not there’s another pause (more on that later) or loan forgiveness on the horizon, some borrowers may already be getting debt relief.

The Department of Education recently announced that nearly 100,000 people are eligible for student loan forgiveness due to changes to the Civil Service Loan Forgiveness Program in October. The move represented about $6.2 billion in relief, according to The hill.

Under the PSLF program, eligible borrowers were promised that their debt would be forgiven if they made payments over a 10-year period. To be eligible for the programyou must work full-time for the government or a nonprofit organization, have direct loans, repay them under an income-based repayment plan, and make 120 qualifying payments.

Teachers, some volunteers, and people working in specific industries may qualify for a student loan cancelation. There is a number of other cases in which your student loans could be canceled, canceled or discharged.

Could another payment break occur?

The Department of Education reportedly ordered companies that handle federal student loans not to send notices about resuming payments in May, CNBC Reports. According to NPRthe department has a legal obligation to contact borrowers at least six times before payments begin – telling businesses not to reach out, some believe the administration was signaling another moratorium on payments.

It came shortly after White House Chief of Staff Ron Klain noted Biden wanted to decide on debt cancellation before payments restart, “or he will extend the pause.”

Pushing for another payment break may also benefit Democrats as the midterm elections approach.

There are, of course, critics of another pause in student loan payments. Many point to the costs that the postponement has imposed on the federal government and taxpayers, which amount to nearly $50 billion a year.

As it stands, the student loan payment break is set to end on May 1.

The Associated Press and NewsNation’s Leland Vittert contributed to this report.

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