Student Loan Relief Update | Seyfarth Shaw LLP

Student Loan Relief Update | Seyfarth Shaw LLP

On February 4, 2021, United States Senator Elizabeth Warren (D-Mass.) and Senate Majority Leader Chuck Schumer (D-N.Y.), and Congresswoman Ayanna Pressley (D-Mass.) reintroduced a bicameral decision asking President Biden to make use of his authority beneath the Higher Education Act to cancel as much as $50,000 in student loan debt for Federal student loan debtors. The decision calls on the President to make use of govt authority to cancel student loan debt and guarantee there isn’t a tax legal responsibility for Federal student loan debtors ensuing from administrative debt cancellation. 

https://www.warren.senate.gov/imo/media/doc/Student%20Debt%20Resolution%20Leg%20Text.pdf

The decision cites 43 million Americans holding over $1.5 trillion in student debt, the Covid-19 financial recession and unemployment, disparate impression on black, brown and feminine debtors, and the burden on co-signors as trigger for loan aid.   In addition to debt aid, the decision requires the President “to ensure that administrative debt cancellation helps close racial wealth gaps and avoids the bulk of Federal student loan debt cancellation benefits accruing to the wealthiest borrowers” and “to proceed to pause student loan funds and curiosity accumulation for Federal student loan debtors for the whole length of the COVID–19 pandemic.  Id.

According to a press launch issued by Senator Warren, [o]ver 325 civil rights, local weather, well being, labor, shopper rights, and student organizations have known as on President Biden to cancel federal student debt utilizing govt motion, together with American Federation of Teachers, National Education Association, The Education Trust, Hispanic Federation, NAACP, National Urban League, UnidosUS, League of United Latin American Citizens (LULAC), Minority Veterans of America, National Women’s Law Center, SEIU, the American Psychological Association, Sunrise Movement, the United States Student Association, and Young Invincibles.

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Initial studies on the Resolution point out that President Biden is inclined to defer govt motion on the request, preferring that Congress deal with student loan aid.