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Student loan forgiveness could become reality after Dems win control of the Senate

President-elect&#xA0;<a href="http://foxbusiness.com/category/joe-biden" target="_blank">Joe Biden</a>&#xA0;could make good on his campaign promise to&#xA0;cancel billions of dollars in&#xA0;<a href="https://www.foxbusiness.com/category/student-loans" target="_blank">student loan</a>&#xA0;debt after Democrats flipped the Senate last week, securing a monopoly on&#xA0;power for the first time in more than a&#xA0;decade.Continue Reading BelowThe incoming Biden administration plans to ask Congress to immediately cancel $10,000 in student debt for all borrowers&#xA0;&#x2014; a move that will likely draw criticism from both&#xA0;Republicans who are wary about the nation&apos;s ballooning deficit and progressive Democrats who want the president to move further left on the issue.Sens. Chuck Schumer, D-N.Y., and Elizabeth Warren, D-Mass., as well as Reps. Alexandria Ocasio-Cortez, D-N.Y., and Ayanna Pressley, D-Mass., have urged&#xA0;Biden to use an executive order to cancel&#xA0;$50,000 of outstanding federal student loans per borrower.Warren&#xA0;said Biden could use existing executive authority under the Higher Education Act to order the&#xA0;Department of Education to cancel student loan debt. Previous&#xA0;estimates show that proposal&#xA0;would&#xA0;provide total forgiveness to more than 75% of borrowers and&#xA0;partial&#xA0;forgiveness for more than 95%.&#x201C;We have to push the Biden administration hard,&quot; Ocasio-Cortez told Punchbowl News last week.&#xA0;&quot;This whole thing, &#x2018;We can&#x2019;t cancel student loan debt,&#x2019; is not gonna fly.&#x201D;But Biden has said it&apos;s &quot;arguable&quot; whether the president has the power to forgive $50,000 in student debt without the approval of Congress.&#x201C;I&#x2019;m going to get in trouble for saying this, [but] it&#x2019;s arguable that the president may have the executive power to forgive up to $50,000 in student debt,&#x201D; Biden told The&#xA0;<a href="https://www.washingtonpost.com/opinions/trump-is-trashing-the-government-on-his-way-out-biden-is-confident-he-can-fix-it/2020/12/23/c69fc9c2-4553-11eb-b0e4-0f182923a025_story.html" target="_blank">Washington Post</a>&#xA0;in December. &#x201C;Well, I think that&#x2019;s pretty questionable. I&#x2019;m unsure of that. I&#x2019;d be unlikely to do that.&#x201D;Under&#xA0;legislation endorsed by Biden,&#xA0;<a href="https://www.savingforcollege.com/article/house-scales-back-student-loan-forgiveness-as-heroes-act-passes" target="_blank">economically distressed</a>&#xA0;borrowers would immediately have $10,000 in student debt forgiven. The government would also cover monthly loan payments for people with private student loans until September 2021 and forgive $10,000 of their debt.&#x201C;Immediate $10,000 forgiveness of student loans, helping people up there in real trouble,&quot; Biden said in November. &quot;They&#x2019;re having to make choices between paying their student loan and paying the rent. Those kinds of decisions.&#x201D;Critics of large share&#xA0;debt cancellation have also argued it would disproportionately benefit individuals with higher incomes who likely did not lose their job during the pandemic-induced recession. More than 70% of laid-off workers do not have a bachelor&apos;s degree, including 43% who did not attend college at all.Less than one-third of all student debt is held by households without a bachelor&apos;s degree &#x2013;&#xA0;while nearly two-fifths of debt is held by households with graduate degrees. A recent survey conducted by the&#xA0;<a href="https://www.pewsocialtrends.org/2020/09/24/economic-fallout-from-covid-19-continues-to-hit-lower-income-americans-the-hardest/" target="_blank">Pew Research Center</a>&#xA0;shows that most of the economic suffering from the crisis is concentrated among less-educated individuals.Analysis from the&#xA0;<a href="http://www.crfb.org/blogs/canceling-student-loan-debt-poor-economic-stimulus" target="_blank">Committee for a Responsible Federal Budget</a>&#xA0;shows that canceling student loan debt is an ineffective stimulus measure: Eliminating $1.5 trillion in loans would translate to just $90 billion or less in cash available to spend in 2021, and $450 billion over the next five&#xA0;years.&quot;The majority of those most affected by the current economic crisis likely have little or no student debt,&quot; the analysis said, noting that more than 70% of unemployed workers do not have a bachelor&apos;s degree. &quot;It is unlikely that broad student debt cancellation would be well-targeted toward those experiencing income loss. Nor is it well targeted toward those with low incomes.&quot;Outstanding student loan debt has doubled over the past decade, nearing a staggering $1.7 trillion. About one in six American adults owes money on federal student loan debt, which is&#xA0;the largest amount of non-mortgage debt in the U.S. It&#xA0;has been cited as a major hindrance in people&#x2019;s &#x201C;economic life&#x201D; by Federal Reserve Chairman Jerome Powell.Biden has also promised to extend the Trump administration&apos;s pause&#xA0;on federal student loan payments, which is scheduled to lapse this month. It&apos;s unclear for how&#xA0;long Biden would extend the payment freeze.&quot;On day one, the president-elect will direct the Department of Education to extend the existing pause on student loan payments and interest&#xA0;for millions of Americans with federal student loans,&quot; said David Kamin, the incoming deputy director of the National Economic Council.