Student loans

‘Yes’ – Biden to soon decide on student loan relief and gas tax exemption to fight inflation

President Biden confirmed Monday that he is close to making a decision on student loan forgiveness and gas tax relief for millions of Americans.

“Yes,” Biden said Monday in response to a reporter’s question about whether he was close to a decision on enacting a large-scale student loan forgiveness. Biden also said he would decide within days whether to support a gas tax exemption. The administration is looking at these options as potential tools to counter rising prices and historic inflation.

Here is the latest.

Biden may support gas tax holidays and gas discount cards

Biden plans to support a pause on the federal gasoline tax in response to worsening inflation and historically high gasoline prices. Gasoline tax is just over 18 cents per gallon.

“I’m hoping to have a decision based on the data I’m looking for by the end of the week,” Biden told reporters Monday in Delaware.

Biden would not have the power to unilaterally enact a gas tax exemption. Congress should pass legislation to suspend the gas tax. But Biden’s public support could spur Congress to act. Biden is also reportedly considering supporting sending gas rebate cards to millions of Americans to help offset the cost of rising gas prices.

Biden eyes broad student loan waiver

Unlike the gas tax, many student loan legal experts and Democrats in Congress say Biden has the legal authority to enact broad student loan forgiveness through executive action, without Congress needing to. to pass a bill.

Biden has consistently supported large-scale student loan forgiveness since his 2020 presidential campaign. Until recently, however, administration officials were calling on Congress to pass a student loan forgiveness bill. With such legislation looking unlikely to pass before the midterm elections, the administration is under increasing pressure to use executive action to write off student loan debt on a massive scale. And Biden has recently expressed more openness to doing so.

While Biden rejected $50,000 in large student loan forgiveness — an amount backed by student loan borrower advocacy groups, civil rights organizations and top Democrats in Congress — he indicated he could support $10,000 in student loan forgiveness for borrowers. Recent reports suggest that the administration is strongly considering imposing income restrictions on eligibility for student loan forgiveness, which could complicate and delay the implementation of any student loan relief.

Education Secretary Miguel Cardona said earlier this month that federal student aid officials are “ready to roll” and will implement whatever Biden decides to do for student borrowers. Administration officials have repeatedly stressed that no final decision has yet been made.

Biden may extend student loan hiatus

While not specifically mentioned by Biden on Monday, the administration will also soon have to decide whether to extend the current student loan payment pause, which is in effect for most (but not all) federal loan borrowers. students since March 2020. This relief also includes an interest freeze and a suspension of collection efforts for defaulted federal student loans.

After several short-term extensions by President Trump and President Biden, the most recent extension to the student loan payment pause is set to end on August 31. It means student loan payments would resume for millions of borrowers in September for the first time in two and a half years.

Ministry of Education officials have hinted that a further extension is possible. And Education Secretary Miguel Cardona promised borrowers in May they would have “a long on-ramp with clear information” before resuming payments. Time is running out, the administration may be heading for another extension of the student loan pause.

Meanwhile, other administration officials have suggested that any decision to extend the student loan payment break could be tied to a decision on a broad student pardon. A senior White House official recently indicated that at least some in the administration see the resumption of student loan repayments as a necessary inflationary counterbalance to the cancellation of billions of dollars in federal student loans.

Further Reading on Student Loans

560,000 borrowers will get automatic student loan forgiveness, but others can still apply for relief

5 things borrowers should know about Biden’s $25 billion student loan forgiveness

Biden’s new student loan forgiveness changes could end up costing some borrowers

If Biden enacts a broad student loan waiver, it could look like this