The prospect of federal student loan forgiveness is a daily topic in the media these days. However, it seems the only thing people can agree upon is that there’s no single path forward. Among other things, there’s uncertainly around:
- Whether President Biden can use his Executive Authority to forgive large numbers of federal student loans.
- The amount of debt to be forgiven.
- The fairness to borrowers who had paid off their debt or to borrowers who are ineligible due to their loan program or type.
- The effect loan forgiveness might have on inflation, if any.
The Biden Administration is currently exploring a sliding scale for mass student loan forgiveness eligibility based on income. Even though Americans’ tax information has been used by the IRS to issue benefits tied to income, the U.S. Department of Education does not have access to that income data. Therefore, it’s uncertain how borrower income would be validated. President Biden is expected to announce his student loan forgiveness plan in July or August. We’ll keep you posted on updates.