Secret Student Loan Memo Means This For Student Loan Cancellation

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The long-awaited and just released secret student loan memo means this for student loan cancellation.

Here’s what you need to know.

Student loans

The heavily drafted memo that student loan borrowers have been waiting for since April has finally been made public through a Freedom of Information Act request. The memo, which purportedly concerned the president’s legal ability to unilaterally cancel student loans without further authorization from Congress, was released along with dozens of other emails from the US Department of Education. You won’t get much from the memo itself – the entire memo is written. However, the title – “Secretary’s Legal Authority for Large-Scale Debt Cancellation” – remains. Here’s what that note means for student loan cancellation:

1. This student loan note does not mean anything for the cancellation of the student loan

Based on the heavily drafted memo that was released, the student loan memo in its current form means nothing for student loan cancellation. The memo is fully drafted, so it is unreasonable to conclude anything regarding the cancellation of the student loan. The title of the memo confirms the topic, large-scale student loan cancellation, and its connection to legal authority. However, this is not news. White House Chief of Staff Ron Klain confirmed in April that the Education Department was preparing a note on the same topic. However, since the memo is redacted, its content is unclear, including potential recommendations for student loan cancellation.


2. There is no evidence that the Biden administration “hid” the note on the cancellation of the student loan.

Some have claimed that the Biden administration deliberately “withheld” the student loan cancellation memo. Members of Congress including Representative Ilhan Omar (D-MN) have called for the student loan memo to be released. However, it is not clear if this is the entire memo, the only memo, or if there is a memo that the education department has completed. Essays are based on privileged lawyer-client communication and should not be viewed as an attempt to hide the content of the note. During the Trump administration, the Department of Education wrote a memo on canceling student loans, concluding that the president cannot unilaterally order the cancellation of student loans without further authorization from Congress. Biden’s presidential campaign staff likely looked at the student loan forgiveness. It would not be surprising if the White House and the Department of Education also analyzed the president’s legal authority. So a singular focus on this student loan forgiveness note is understandable, but it is not the final note on student loan cancellation.


3. Biden concluded that he did not have the legal authority to cancel everyone’s student debt

Biden has already determined that he does not have the legal authority to write off everyone’s student loan debt without further authorization from Congress. If he came to the opposite conclusion, Biden would have already canceled the $ 10,000 student loan for student loan borrowers. Biden is free to change his position. However, his focus on targeted student loan cancellation to date, coupled with his repeated call for Congress to pass legislation to cancel student loans, suggests that he doesn’t think the president has such authority. legal. As such, this indicates that he does not intend to write off everyone’s student debt.


4. The memo is not binding and Biden can choose whether or not to apply the cancellation of the student loan.

Remember this: a legal notice is non-binding legal advice. It is not a proclamation, a court order or a law. The president receives all types of political and legal recommendations. However, as Klain noted in April, the final decision on canceling the student loan rests with the president. The president can accept or reject the recommendations of the Department of Education, as the president does on a daily basis based on other recommendations he receives. U.S. Education Secretary Miguel Cardona said the Biden administration is still exploring student loan forgiveness, suggesting the student loan forgiveness is still alive. It doesn’t appear that Biden is leaning in any way toward a full-scale student loan forgiveness. However, the Biden administration has made a clear commitment – backed by measures – to providing more student loan relief and more student loan cancellations for student loan borrowers.


What this means for your student loans

It is important to understand what this memo represents. If the memo recommends that Biden have legal authority, please don’t assume that all of your student loans will be canceled. Most importantly, don’t think of it as “all we need is the memo to say he can cancel student loans and then we can get student loans automatically canceled.” This is not how it works; it is only a non-binding recommendation, not a court decision. Once again, Biden will make the final decision. The Department of Education does not have private student loans, so the legal analysis is likely limited to federal student loans only. Plus, not all student loan borrowers would even qualify for a student loan discount. The main congressional proposal, for example, would limit student loan cancellation only to federal borrowers earning up to $ 125,000 per year. So, there may be a student loan forgiveness but may not be eligible. It is not known when or if the note on student loan cancellation will be released. In the meantime, focus on your student loan repayment strategy. Student loan relief due to the Covid-19 pandemic will expire on January 31, 2022. This should be your number one priority now. Make sure you understand all of your options to pay off your student loans faster. Here are some popular options for your student loans:


Student loans: related reading

Here’s who’s eligible for the student loan waiver right now

Student loan cancellation will not be available to these borrowers

How to get approved for a student loan forgiveness

3 ways to get a lower student loan repayment


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