No, you cannot cancel your own student loans.
Here’s what you need to know.
Rep. Tom Cole (R-OK) introduced the Can’t Cancel Your Own Debt Act, which:
- prevent members of Congress from having their student loans forgiven under federal student loan forgiveness programs if passed while in Congress;
- this includes student loan cancellation by executive order (the President), agency action (US Department of Education), or act of Congress (Congress);
- prevent members of Congress from obtaining service- or employment-based student loan forgiveness (such as civil service loan forgiveness) for time served as a member of Congress.
(The student loan forgiveness could be the reason the Democrats lose the midterm elections).
“The American people expect their representatives to act impartially and in the best interests of their constituents – not in their own financial interests,” Cole said. “It is simply unconscionable that a member of Congress earning an annual salary of $174,000, paid by the American taxpayer, should then personally benefit by voting to cancel the repayment of his federal student loans. Members of Congress earning six-figure salaries should surely be required to repay the money they borrowed from the US Treasury.
Congress shouldn’t be able to cancel its own student debt
Cole wants to exempt members of Congress from getting federal student loan forgiveness because of the inherent conflict of interest. Cole fears that lawmakers who support large-scale student loan cancellations are also seeking cancellation of their student loans. (Where Biden stands on student loan cancellation). According to recent revelations, 59 members of Congress collectively hold nearly $6 million in student loans. Cole referenced a recent letter that 80 House and Senate Democrats sent to President Joe Biden regarding immediate student loan forgiveness of up to $50,000 in student loans. According to recent financial disclosures, 17 members of Congress who signed the letter collectively reported personal student loan debt of up to $1.9 million. Cole notes that if Congress or the President cancels up to $50,000 in student loans, 11 of those 17 Congressmen would have their student loans. completely canceled.
(How Federal Student Loans Will Change This Year).
Virtually Congress Won’t Cancel Its Own Student Loans
Congress is unlikely to seek to cancel its own student loans. (Biden canceled $15 billion in student loans). Cole’s proposed legislation would explicitly prohibit any attempt by a member of Congress to benefit from large-scale student loan forgiveness. Practically, here’s why members of Congress won’t get student loan forgiveness.
- Large Scale Student Loan Cancellation: Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) have offered up to $50,000 in student loan forgiveness. However, Schumer and Warren would limit student loan forgiveness based on an annual income of $125,000. Since members of Congress earn $174,000 a year, they would not qualify for student loan forgiveness under this proposed plan. (Here’s Who Won’t Get Student Loan Forgiveness). That said, that income threshold could change, so Cole’s legislation wants to specify that members of Congress would be disqualified from student loan forgiveness, regardless of income.
- Abandonment of public service loan: (Do you qualify for $5 billion in student loan forgiveness?) The Civil Service Loan Forgiveness Program provides federal student loan forgiveness for borrowers who work full-time for a qualified civil service or a non-profit employer and make 120 monthly payments. Serving as an elected member of Congress does not qualify for a public service loan discount. This is already the policy of the US Department of Education. That said, Cole’s legislation would reiterate that policy.
Student loans: next steps
Although members of Congress may be barred from student loan forgiveness, you may be wondering if you can qualify. Although there are several possibilities for student loan cancellation, there does not seem to be a clear path to large-scale student loan cancellation. Congress hasn’t passed any legislation, and Biden doesn’t believe he has the executive power to circumvent Congress. Importantly, temporary student loan relief is ending soon. So make sure you’re ready for the restart of student loan repayments. This includes understanding all of your options and choosing the best course of action based on your personal situation and financial goals.
Here are some popular ways to save money on your student loans: