Congress may cancel student loans more than once. Here’s what you need to know—and what it means for your student loans. Will Congress cancel student loans more than once? If you asked that question a few days ago, the answer would have been no. Student loan cancellation is supposed to be a one-time event. On the Senate floor, Senate Majority Leader Chuck Schumer (D-NY) said eight words that could change the trajectory of student loan cancellation. If you didn’t listen closely to his speech on student loans and the new stimulus package, you would have missed his statement because it happened that quickly. However, these eight words may give direct insight into what Congress is thinking with regard to student loan cancellation—and it’s not what you may think. When referring to student loan cancellation, Schumer referenced these eight words: “future efforts to forgive student loans as well.”Whether you think President Joe Biden cancels student loans through an executive order or Congress enacts student loan cancellation by executive order, both proposals are expected to occur one-time and one-time only. For example, Biden wants to cancel $10,000 of student loans immediately, while Sen. Elizabeth Warren (D-MA) and Schumer want Biden to cancel up to $50,000 of student loans. Neither proposal references any future student loan forgiveness. Schumer made the statement about “future efforts to forgive student loans” when speaking about how the stimulus package will make student loan cancellation tax-free. Schumer believes that making student loan cancellation tax-free now will make it easier for Biden to cancel student loans by executive order. However, Schumer’s statement also could mean student loan borrowers could get student loan cancellation more than once. Here’s what this statement could mean for your student loans:There are many ways to interpret Schumer’s statements and what they mean for your student loans. For example:Rather than one-time student loan cancellation, Congress could cancel student loans more than once. Here’s how this could work in practice. Congress could cancel $10,000 or up to $50,000 of student loans in the near-term, for example. Then, next year, Congress, or the president by executive order, could cancel student loans again. If this happens, it would defeat the argument that one-time student loan cancellation won’t help future student loan borrowers. For example, if student loan cancellation is only one-time today, that means anyone who borrows student loans tomorrow or the next day could not get any student loan cancellation. However, if Congress plans for wide-scale student loan forgiveness again in the future, future borrowers also could benefit from student loan cancellation. It’s possible that Schumer was not referring to multiple rounds of student loan cancellation, and instead was referring simply to “student loan cancellation that occurs in the future. All data is taken from the source:
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