Biden plans to forgive federal student loans | Voice of America

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President Joe Biden plans to fundamentally change the position of student borrowing from the federal government, which could make the lives of many young Americans much easier.

As of 2019, about a third of Americans under 30 had student loans. according to the Pew Research Center… According to The Institute for College Access and Success, the average debt burden in 2018 was $ 29,200. Those with student loans are more likely to report financial difficulties. according to Pugh

There are over $ 1.5 trillion in outstanding student loans, according to Federal Student Aid, a division of the Department of Education. owns 42.9 million people… According to the Brookings Institution, the government limits federal student loans to $ 31,000 for students receiving contributions from their parents and $ 57,500 for independent students.

“Those who owe more almost always borrowed for graduate studies,” Brookings explained

It’s important to quantify student debt, Brookings said. Most students graduate from college with little or modest debt… According to him, about 30% of students drop out of school without debt and about 25% with less than $ 20,000.

“Despite the horrific stories of college graduates with six-figure debt, only 6% of borrowers owe more than $ 100,000 – and they owe about one-third of all student debt,” Brookings wrote in January 2020.

Biden’s plan

According to the Biden plan, individuals earning $ 25,000 or less per year will not have to make loan payments, but interest will not be charged on these loans

His plan doesn’t say if the $ 25,000 income is based on Free Federal Student Aid App (FAFSA), a US government application through which students apply for and receive federal loans. FAFSA loans are determined by the college where they are studying and are calculated based on the income of the student and their parents. It is unclear if parents claiming and receiving tax deductions for their dependents have lose this deduction

Biden’s plan does not apply to the Direct PLUS loan, which allows parents to borrow money for help undergraduate students pay for higher education

According to its website, those who exceed this limit will “pay 5% of their discretionary income (income minus taxes and basic expenses such as housing and food) in excess of $ 25.00 against their loans.” Individuals with both new and existing loans will be automatically enrolled in this income-oriented program

After 20 years, those “who made payments responsibly through the program will be 100% forgiven,” the website says. It is not explained what “responsible” means in this case.

For government officials, Biden wants to create a program that, according to his website, “offers $ 10,000 in debt relief to undergraduate or graduate students for each year of national or public service up to five years.” Those who work in schools, nonprofits, and government will automatically be enrolled in this program

A November 2020 poll from Data for Progress asked 1,087 likely voters about the plan. Of those who identified themselves as Democrats, 48% fully supported the idea; 26% of Republicans strongly oppose

Biden’s plan includes fixing the government service loan forgiveness program through the 2019 What You Can Do for Your Country Act, led by Democratic Senators Tim Kane and Kirsten Gillibrand, which will “provide millions of teachers, social workers, and members. military, first responders, nurses, public defenders and many other civil service professionals will be eligible for loan forgiveness they earned… “

Biden will extend the March 2020 emergency relief provided by former Education Minister Betsy DeVos until October, resulting in a suspension of loan payments, a suspension of collection of overdue loans and set interest rate 0% for 60 days due to pandemic

Biden also announced plans to address the issue of college accessibility. He plans to make university tuition free for those whose families earn less than $ 125,000 a year. Biden also wants to double federal Pell Grant, awarded to students who demonstrate exceptional financial need. IN the maximum award amount is $ 6,345 for the 2020-21 academic year and is non-refundable.

The president said he wants to take additional steps to tackle private lenders, expand benefits after 9/11, and invest in educational institutions that serve students of color, such as colleges and universities for blacks (HBCUs) and other institutions serving minorities. institutions.

More ideas

Other Democrats are in favor of broader relief.

Since September, Democratic Senators Elizabeth Warren and Chuck Schumer have called on President Biden – through presidential decree – to write off borrowers $ 50,000 federal student loan debt under the Higher Education Act. The plan was to make sure that upon cancellation, the borrowers have no tax liabilities

“For tens of millions of borrowers, student loan debt has become an overwhelming burden,” Warren said in December. “I just want to give you some numbers. Nearly 43 million Americans are buried under $ 1.5 trillion in federal student loan debt. About 9 million of these borrowers default. “

At Columbia University, a private Ivy League school in New York, students organized a strike for training

Willem Morris, organizer of the Colombian Chapter of America’s Young Democratic Socialists, said students were encouraged to see other Ivy League institutions slash tuition fees. In July 2020, Princeton announced that 10% discount on tuition

“But students saw the concessions other schools were making and saw Colombia charging the same price for these Zoom classes again in this economic crisis,” Morris told Voice of America. “And the students decided they didn’t want to accept it anymore.”

More than 4,100 students signed up to strike for tuition, according to Morris. Morris explained that Columbia has already canceled late tuition fees for those who do not pay on time.

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