Meet the heroes and villains of student loan cancellation.
Here’s what you need to know.
Wherever you go, someone has their own opinion on student loan cancellation:
“Cancel student loan debt.”
“He didn’t pay off enough student loan debt.”
“He wrote off too much student loan debt.”
“Why don’t we cancel credit card and mortgage debt?”
“President must cancel student loans up to $ 50,000.”
“Congress should cancel student loans up to $ 10,000.”
Whether you support or oppose a large-scale education loan forgiveness, there are certain heroes and villains in this epic political debate. Like any good season Survivor, let’s get acquainted with the heroes and villains:
Here are some famous heroes (this list is not exhaustive, so there are other heroes):
Biden Cancels Nearly $ 70 Billion Student Loans
Biden has canceled more student loans than any president in history. This includes:
- $ 5.8 billion student loans for student loan borrowers with full and permanent disability;
- $ 1.3 billion – student loan cancellation for 41,000 student loan borrowers in March;
- more than $ 1.5 billion in student loans through borrower protection prior to repayment for nearly 92,000 student loan borrowers; and
- another $ 1.1 billion in student loans were canceled due to borrower protection to maturity.
In total, Biden canceled nearly $ 9.8 billion in student loans. However, there is more. By extending the student loan exemption twice as president through January 31, 2022, Biden will cancel another $ 60 billion in student loan.
Senators Elizabeth Warren and Chuck Schumer want Biden to cancel your student loans
Senator Elizabeth Warren (M.D.) and Senate Majority Leader Chuck Schumer, New York, have advocated forgiving student loans on behalf of student loan borrowers. Warren and Schumer are the public faces of student loan forgiveness, and they have waged a long battle on behalf of the progressive in Congress and other stakeholders who support widespread student loan forgiveness. Their proposal is simple: Biden, as president, must issue an order canceling payments of up to $ 50,000 for student loan borrowers. Canceling student loan debt, they say, will give student loan borrowers a fresh financial start that will allow them to get married, start a family, buy a house, save money for retirement, or start a new business. However, their student loan debt cancellation plan will not be available to every student loan borrower. In contrast, Warren and Schumer support student loan abolition only for federal student loan borrowers who earn up to $ 125,000 a year.
President Donald Trump renews student loan exemption twice
President Donald Trump was president during the Covid-19 pandemic, and Trump extended his student loan exemption twice. It has helped millions of post-Covid-19 student loan borrowers and provided substantial financial relief after the expiration of student loan exemptions under the Cares Act – a $ 2.2 trillion stimulus package. Trump extended the student loan exemption from October 1, 2020 to December 31, 2020, and again until January 31, 2021. Although Trump stepped down on January 20, 2021, Trump may have extended the student loan exemption again, resulting in more help for student loan borrowers. … Based on $ 5 billion a month in savings, according to the U.S. Department of Education, Trump canceled about $ 20 billion in student loans for student loan borrowers. Trump has advocated simplifying student loan repayments and proposed a plan to cancel student loans for student loan borrowers in 15 years (up from 20 years under current income-based repayment plans).
Secretary Miguel Cardona wants to help improve your student loans
U.S. Education Secretary Miguel Cardona partnered with Biden in canceling a student loan. As Minister of Education, Cardona helped secure the cancellation of a student loan totaling nearly $ 10 billion. This includes student loan cancellation for borrowers with full and permanent disabilities, as well as for borrowers who have been misled by their college or university and have asked for a student loan forgiveness under the borrower’s repayment protection rule. Cardona, along with Federal Student Aid COO Richard Cordray and others in the Department of Education, wants to give student loan borrowers a fair shake-up. Among other things, they are working to improve income-adjusted repayment plans, hold student loan servicers accountable, improve government service loan forgiveness, and make student loan forgiveness more affordable for student loan borrowers.
Congress Adopted Incentive Package That Provided Huge Student Loan Incentive
The bipartisan Congress, led by then Senate Majority Leader Mitch McConnell (R-KY), passed the Cares Act, a $ 2.2 trillion stimulus package that provided unprecedented student loan aid to millions of Americans. In March 2020, Trump signed into law the Personal Care Act. Among other benefits, the Care Act provided for:
- no compulsory federal student loan payments;
- Interest rate 0% on federal student loans; and
- not collecting student loan debt in case of default.
This temporary student loan exemption has helped millions of Americans during the Covid-19 pandemic. Cumulatively, the US Department of Education estimates that this would result in the cancellation of more than $ 110 billion in student loans. This student loan exemption will expire on January 31, 2022 following four Trump and Biden extensions. One of the hidden benefits of this legislation was the ability for student loan borrowers to “tally” their defaults to meet income-based payment claims and public service loan forgiveness programs, both of which could lead to student loan forgiveness for federal student loans.
Here are some famous villains (this list is not exhaustive, so there are other heroes):
Betsy DeVos has championed a balance of interests between student loan borrowers and others.
Former US Education Secretary Betsy DeVos says she has sought to balance the interests of student borrowers and non-student borrowers to create fair public policy. She sought to restore order to the education system, which she considered broken and inexplicable. Many borrowers and student loan advocates have called DeVos the villain for her opposition to widespread student loan forgiveness and government service loan forgiveness. Student loan borrowers also criticized DeVos for its low approval rates for public service loans forgiveness, which sometimes hovered around 1-2%. However, DeVos believed her actions to limit borrower protection to repayment helped cut federal spending. It has also helped increase transparency through updates such as the Reference Tool for Public Service Loan Forgiveness, as well as extensive data on colleges and student loan debt.
Student loan services continue to be criticized for misleading student loan borrowers
During the Covid-19 pandemic, the staff serving student loans continued to be criticized. Student loan servicers have been accused of misleading student loan borrowers, engaging them in improper student loan repayment programs, misapplying student loan payments, negatively affecting credit reports, and a host of other problems. Warren said the student loan exemption should be renewed after January 31, 2022 because its staff are not willing to pay student loan borrowers. Most recently, two major student loan providers announced they are not renewing their contracts with the US Department of Education, which could affect 10 million student loan borrowers until new service organizations are identified.
Student Loan Forgiveness: Final Thoughts
Student loan forgiveness has its ardent supporters and opponents. Perhaps you think that some of the heroes should be moved to the villains and vice versa. For example, some say that Biden did not cancel enough student loans and only advocated targeted cancellation of student loans. Others, such as House Speaker Nancy Pelosi, Calif., Believe Warren and Schumer are wrong in claiming that the president can revoke student loans even though they claim the president is unilateral under the Higher Education Act of 1965 … argue that Republicans in Congress are the main obstacle to large-scale student loan abolition, even if there are many Democrats in Congress who also oppose large-scale student loan abolition. Finally, not all student loan staff are bad, and it would be unfair to criticize DeVos for every political decision she made during her tenure. The bottom line is that the fight for student loan cancellation will continue, but it may not have a clear direction or final outcome.
Cancellation of the student loan is not over yet. It is possible that more heroes and villains will appear in the coming months and years. However, the student loan exemption is about to expire and there is no clear path to widespread student loan abolition. This means that you should prepare to pay off your student loan. Explore all your options to make an informed choice. Here are some popular ways to save money with student loans:
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