Guess Who The Major Winners of Biden’s Loan Forgiveness Are?

The morality and the legality of canceling student debt were initially under scrutiny. The bigger question was if anybody has legal standing to sue to prevent forgiveness from happening, even though the response to that question is “probably not.”

The House or the Senate would be a strong contender, but only if the Republicans win control of one of those chambers in January and the loans aren’t already forgiven.

Even if those two things were to happen, Republican members might still have to win over the program’s most prominent supporters: their own staff.

In the week, the Education Department issued revised guidance on the administration of loan forgiveness, clarifying that debtors who made voluntary payments during the current pause in student loan payments will have those payments refunded in full, in addition to the maximum $20,000 in forgiveness.

The Department clarified that “refund claims can only be submitted by you and reimbursed to you,” even if somebody else paid the fee on your loan.

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This will make things more complicated when parents or other family members assist their children in repaying student loans during the pandemic, and possibly much more so when the borrowers’ employers are repaying the loans.

In general, these kinds of setups are uncommon. According to SHRM, only 42% of companies offer any form of tuition reimbursement, and it is likely that the great majority of these contracts fund job-relevant exercises rather than reimbursement of past loans.

However, members of Congress are one category of employees whose employers are known to provide loan repayment as a perk regularly.

A recent article in Politico noted that “almost 2,000 Hill employees are enrolled” in these plans and that “the House recently boosted the lifetime cap of the perk to $80,000 from $60,000.”

Up to $60,000 in aid may be available to executive branch employees working for President Joe Biden.

Furthermore, Politico reported that most Hill employees earn less than the $125,000 limit set by the White House, leaving them eligible for a $10,000 federal debt forgiveness if they are Pell Grant recipients and a further $10,000 if they are not.

But according to clarification from the Education department this week, employees in the House and Senate may get thousands of dollars in tax-free compensation from this program retroactive to March of 2020.

Since they work for the government, taxpayers are double-dipping to cover the cost of their pardons.

This is very exciting for the employees, but they should also be aware of the potential consequences should the Republicans win control of either chamber come January.

Will employees of the House and Senate, particularly those on the Republican side, be able to overlook the perks they stand to get as their employers decide what to do about it?

Notice: This article may contain commentary that reflects the author's opinion.