Six experts who spoke with us recently said that it’s time to forget all about student loan forgiveness.
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Federal student loan borrowers hoped that the government would forgive some of their debts during the COVID-19 crisis. While some Democrats have advocated for forgiveness of up to $50,000 per borrower, most Republicans strongly opposed it. President Joe Biden repeatedly stated that he supports the idea to cancel $10,000 per borrower.
But what now? Andrew Crowell, vice-chairman of wealth management at D.A. Financial Services says it’s a pipe dream. Davidson & Co. recently did research on student loans.
When Jen Psaki was asked Tuesday if the Biden administration would extend the payment pause in light of growing concern about the Omicron COVID-19 variation, Jen Psaki responded simply: “The president is not making a decision yet.” This comment came after Psaki had stated on Dec. 10, that the administration planned to end the current payment freeze on February 1.
Since his election, the Biden administration has approved $11.5 billion in student loan relief for almost 600,000. This is a significant but minor percentage of the $1.6 trillion student loans that Americans collectively owe.
We are almost at the end of 2021 and there isn’t an executive or legislative plan to forgive all federal student loan debt. Miguel Cardona, Education Secretary, provided the most recent update at the end October. He stated that the Biden administration is continuing to study broad-based loan forgiveness.
Experts Say That Mass Student Loan Debt Cancellation Will Not Happen
To better understand student loan issues, we interviewed at least 12 experts over the course of the year. We also asked them for their predictions on student loan forgiveness.
Since then, there have been no new developments in the matter from Congress or the White House. We decided to contact many of the same experts (and new ones) to find out if their predictions regarding broad-based loan forgiveness had changed.
- All of the experts that we spoke with agreed on one point: Don’t expect it to happen.
- Point of View: Author of “Borrowing While Black” & Founder of Silver Canady & Associates
Why: Canady is the founder and managing director at an educational research and consulting company. He says there’s little hope for student loan forgiveness because Congress remains divided on whether and how student loans should be forgiven.
Canady says, “I don’t believe total student debt cancellation will happen.” It’s a controversial issue that seems to divide people. It’s possible that I am wrong, but I don’t see Congress joining forces on this issue.
Canady believes that the prospects for widespread forgiveness of student loans are looking increasingly grim. She says Black women will feel the consequences of having lingering debt more than any other race.
Point of View: CEO and founder of The College Investor, student loan news site.
Why? Farrington said that reforms to existing federal loan programs like the income-driven repayment plans or the Public Service Loan Forgiveness program would be more likely than a blanket policy which forgives all student loans. He believes this is still the most likely outcome.
“I believe we have seen some of that. Farrington says that Congress has not done much, but we do see the current administration trying to fix the programs.” “It’s becoming more clear that borrowers shouldn’t expect any kind of blanket forgiveness on student loans,” Farrington said.
View from the founder and managing director of Tayne Law Group Why? Tayne, an attorney who specializes in debt relief, believes that student loan forgiveness will not be available for all borrowers. Tayne, who has five children in college and took on significant debt to attend law school, believes there are more important structural issues in higher education that need to be addressed.
Tayne states, “My opinion remains the same: there won’t be widespread student loan forgiveness.” “But, the wheels are moving to make changes in the way student loans and educational expenses will be structured.”
View from Adam Minsky: Owner and Principal of Law Office Why? Minsky, a student loan lawyer, maintained a similar position to earlier in the year. He stated that there would be a mix of solutions to student debt. His focus was on fixing and revamping existing federal loan programs. For example, the Public Service Loan Forgiveness Program is currently undergoing a temporary overhaul which could allow more borrowers get their loans forgiven.
He says, “I believe that so far that prediction was fairly accurate.” “The Administration has taken executive action to improve and expand federal loan programs.”
View from Student Loan Hero: Certified Student Loan Counselor Why? Pentis had predicted that a dose of forgiveness such as a $10,000 loan cancellation policy could be offered to all borrowers by 2021. He now doubts this will be the case.
He says, “It seems like the [Biden] Administration is focused on student loan relief — maybe not in the manner that people initially believed.” It has forgiven students who were wronged in school, students with disabilities and veterans.
Point of View: Vice Chairman, Wealth Management at D.A. Davidson & Co Why? Crowell’s D.A. company Davidson & Co. recently surveyed student loan borrowers in order to understand their feelings on forgiveness and forbearance. The survey found that more than half of respondents supported the government offering wide-scale forgiveness for student loans. Only 43% of respondents believe that it will be possible during the Biden administration.
Crowell agrees with Crowell on this subject. He says that widespread student loan cancellation is a pipe dream at the moment.
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He says, “I don’t believe there will be any consensus at Capitol Hill. There are questions about whether the president has the political authority to make it happen on his own.” “I believe that the divergence of opinions about how much and how little is too great at this stage.”