President Biden confirmed on Monday that he is nearing a decision on student loan forgiveness and gas tax relief for millions of Americans.
“Yes,” Biden said on Monday in response to a reporter’s question about whether he is close to a decision on whether to enact wide-scale student loan forgiveness. Biden also said he will be deciding within days whether to support a gas tax holiday. The administration is reviewing these options as potential tools to counteract rising prices and historic inflation.
Here’s the latest.
Biden May Support Gas Tax Holiday and Gas Rebate Cards
Biden is considering supporting a pause on the federal gas tax in response to deepening inflation and historically high gas prices. The gas tax amounts to a little over 18 cents per gallon.
“I hope to have a decision based on the data I’m looking for by the end the week,” Biden told reporters on Monday in Delaware.
Biden would not have the power to unilaterally enact a gas tax holiday. Congress would have to pass legislation to suspend the gas tax. But public support by Biden could prompt Congress to act. Biden is also reportedly considering sending gas rebate cards to millions of Americans to help offset the cost of higher gas prices.
Biden Considering Broad Student Loan Forgiveness
Unlike the gas tax, many student loan legal experts and Democrats in Congress say that Biden has the legal authority to enact broad student loan forgiveness through executive action, without the need for Congress to pass a bill.
Biden has consistently supported wide-scale student loan cancellation since his 2020 presidential campaign. Until recently, however, administration officials had been calling on Congress to pass a student loan forgiveness bill. With such legislation seemingly unlikely to pass before the midterm elections, the administration is under increasing pressure to use executive action to cancel student loan debt on a mass scale. And Biden has recently expressed more openness to doing so.
While Biden has rejected $50,000 in broad student loan forgiveness — an amount supported by student loan borrower advocacy groups, civil rights organizations, and top Democrats in Congress — he has indicated he could support $10,000 in student loan forgiveness for borrowers. Recent reporting suggests the administration is strongly considering imposing income restrictions on student loan forgiveness eligibility, which could complicate and delay the implementation of any student loan relief.
Education Secretary Miguel Cardona indicated earlier this month that Federal Student Aid officials are “ready to roll” and will implement whatever Biden decides to do for student loan borrowers. Administration officials have repeatedly emphasized that no final decisions have been made yet.
Biden May Extend the Student Loan Pause
While not expressly mentioned by Biden on Monday, the administration will also soon need to decide whether to extend the ongoing student loan payment pause, which has been in effect for most (but not all) federal student loan borrowers since March 2020. That relief also includes a freeze on interest and a suspension of collections efforts on defaulted federal student loans.
After multiple short-term extensions by President Trump and President Biden, the most recent student loan payment pause extension is set to end on August 31. That means student loan payments would turn back on for millions of borrowers in September for the first time in two and a half years.
Education Department officials have been hinting that a further extension is possible. And Education Secretary Miguel Cardona promised borrowers in May that they would have “a long on-ramp with clear information” before resuming payments. With time running out, the administration may be heading in the direction of a further extension of the student loan pause.
Meanwhile, other administration officials have suggested that any decision on extending the student loan payment pause could be tied to a decision on broad student forgiveness. A top White House official recently indicated that at least some in the administration view resuming student loan payments as a necessary inflationary counterbalance to cancelling billions of dollars in federal student loans.