Don’t Believe These 4 Myths About Student Loan Forgiveness


The election of Joe Biden has sparked enthusiasm among student borrowers. However, it is important to separate fact from fiction.

Here’s what you need to know.

Student loans

When Biden becomes president on January 20, 2021, there is a lot of anticipation about his student loan plans, including paying off student loans and canceling student loans. However, there has been some confusion as to what, if anything, will happen in the short term with regard to student loan cancellation.

Here are 4 myths about your student loans so you know exactly what to expect:

1. Biden will forgive all student loans

Myth: Some borrowers mistakenly believe that Biden’s election means “write off student loans” (especially all student loans).

  • It is a false equivalence. Senator Bernie Sanders (I-VT) has proposed to cancel all student loans, including federal student loans and private student loans.
  • However, Biden, who is politically more moderate than Sanders, has not offered to cancel all student loans.
  • There was no general support in Congress to cancel all student loans.
  • Biden proposed a plan to make two- and four-year public colleges free for students with families earning $ 125,000 or less.
  • Having said that, this does not mean that all student loans will be canceled and will not apply to existing student loans.


2. Biden will cancel student loans

Myth: Biden, as president, cancel student loans.

  • During his presidential campaign, Biden proposed to cancel up to $ 10,000 in student loans.
  • However, Biden’s plan is not for all student loan borrowers or all types of student loans.
  • For example, Biden’s plan to cancel student loans would apply to borrowers who have been affected by the coronavirus.
  • While this definition may be vague, it could apply to borrowers who are unemployed or in economic difficulty due to the Covid-19 pandemic.
  • Therefore, not all borrowers may qualify. Additionally, Biden’s plan can only apply to federal student loans, not private student loans.

3. Biden can cancel student loans by decree

Myth: Biden may take executive action to cancel student loan debt

  • The composition of the US Senate will have important implications for Biden’s political plans for the next four years.
  • If Republicans maintain control of the US Senate, there is less likely to be legislation to cancel student loans.
  • If Democrats control the US Senate, canceling student loans becomes a stronger possibility. However, it is not clear whether Congress passes legislation that reflects Biden’s plan for student loans. Congress could adopt another student loan exemption plan.
  • While Congress does not pass a student loan cancellation law, some have argued that Biden can cancel student loans by executive decree.
  • The US Constitution gives Congress, not the President, “stock market power” (federal spending). If the president took executive action to cancel student loans, that decision would likely be challenged in court. This could inevitably delay any student loan forgiveness for borrowers.
  • Importantly, Biden did not say whether he would consider an executive order to cancel student loans.

4. Biden is the only hope for student loan forgiveness

Myth: With Biden as president, this is the only chance to cancel student loans.

  • Any potential discussion of student loan cancellation involves a widespread and outright forgiveness of student loans.
  • It is important to remember that there are other student loan exemption programs.
  • For example, the Public Service Loan Forgiveness program helps student borrowers qualify for federal student loan exemption if they work for a qualified public service or non-profit employer and make at least 120 monthly student loan payments. (plus other requirements).
  • Biden supports the public service loan forgiveness program and has offered to offer up to $ 50,000 in student loan forgiveness after five years.
  • If you don’t work in the public service but are struggling to repay your student loans, you can also get student loan forgiveness through an income-based repayment plan.
  • Although the student loan forgiveness is not immediate, you can get a student loan forgiveness after 20 years (undergraduate student loan) or 25 years (graduate student loan).

Next steps

Many borrowers expect at least some relief from their student loan. There are many proposals in Congress to cancel student loans. However, it is important to understand the facts so that you can make an informed decision regarding your student loans. The bottom line: Student loan cancellation can happen, but don’t expect it to be inevitable. There are many moving parts in Congress, any student loan cancellation plan can ultimately look different from what has been proposed during a presidential campaign.


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