Student Loan Cancellation Must Happen Now or Democrats Will Lose Majority in Congress, Says MP

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Rep. Alexandria Ocasio-Cortez says student loan forgiveness needs to happen now.

Here’s what you need to know — and what it means for your student loans.

Student loans

The cancellation of student loans should be the main concern. This is the message progressive Democrats in Congress want President Joe Biden to hear sooner rather than later. Ocasio-Cortez (D-NY), along with Sen. Elizabeth Warren (D-MA) and other progressive members of Congress, was a leading voice in pressuring the president to cancel student loans to borrowers. Failure to act, some Democrats say, could have disastrous consequences in the upcoming midterm elections.


Democrats say not canceling student loans would be a disaster

For Ocasio-Cortez, large-scale student loan cancellation is among his top priorities for his party in the November election. She called student loans “ridiculous” and said Biden has all the power, through executive orders, to enact large-scale student loan forgiveness. Without the impending cancellation of the student loan, Ocasio-Cortez says Democrats could lose their majority in Congress. “The president has not used his executive power to the extent that some would say is necessary,” Ocasio-Cortez recently told the New Yorker. “And I can’t stress how the Biden administration’s reluctance to pursue student loan forgiveness has demoralized a very critical voting bloc that the President, House and Senate need to have any chance of preserve one of our majorities.”

(Student loan refinance drops to ridiculously low rates).


Student loan forgiveness: what are the issues?

Specifically, Ocasio-Cortez supports the cancellation of up to $50,000 in student loans for borrowers, which Warren and Senate Majority Leader Chuck Schumer have proposed to the US Senate. (That said, student loan forgiveness has been reduced to $25,000 for student borrowers with a new application). However, Congress has yet to pass legislation that would accomplish this goal. (Here’s Who Won’t Get Student Loan Forgiveness). Narrow majorities in every house of Congress as well as limited support even within the Democratic Party mean large-scale student loan cancellations may never become legislation. This could change depending on the outcome of the November elections. However, to pass such legislation in the next Congress, progressive Democrats would need to win a substantial number of seats in each chamber, which seems unlikely given the electoral map. That’s why progressives are pinning their hopes on Biden, who they believe can enact large-scale student loan forgiveness without congressional action. The problem is that the president disagrees. Biden, who has already forgiven $15 billion in student loans for borrowers, says he doesn’t think he has the executive power to enact full-scale student loan forgiveness for most or all student borrowers. The president backs $10,000 in student loan forgiveness, but wants Congress to pass legislation, which he has promised to sign. (Where Biden stands on student loan cancellation).


Canceling student loans could be the reason Democrats lose midterm elections

Canceling student loans could be the reason Democrats lose the midterm elections. However, it depends. Why? There are two ways to look at student loan forgiveness and its potential impact on the election. If you’re looking at student loan forgiveness through a phased lens, this can be a major issue as the election approaches. Proponents see student loan forgiveness as a stepping stone to financial freedom, a path to home ownership and a fresh start that would spearhead marriage and family formation. Without student loan forgiveness, some progressives may feel misled when they expected student loan forgiveness. If you view student loan forgiveness from a moderate or conservative angle, you may believe that there are bigger economic issues that Democrats should be focusing on. You might be thinking that if the president enacts large-scale student loan forgiveness, it could alienate independent and moderate voters who see student loan forgiveness as wasteful government spending and a massive transfer of wealth. Rather than boosting Democrats’ chances at the polls, this constituency may view any potential action as producing the opposite outcome.


Student loans: next steps

Student loans will resume payments soon. Biden is unlikely to cancel short-term student loans. The safest bet is to prepare now for student loan repayment and not expect large-scale student loan relief. Make sure you understand all of your options, including how to pay off student loans faster.

Here are some popular options to save money:


Student Loans: Related Reading

If Biden cancels student loans, it will happen next

Here’s who won’t get student loan forgiveness

Will student loan repayments be postponed until 2023?

Biden should end student loan relief

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