Student Debt Rises As Loan Forgiveness Status Remains Unclear

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Due to the coronavirus pandemic, the cost of higher education for students and their families is an even more important factor than usual. At the same time, the cost of a four-year college or university has never been higher.

Average tuition and fees for the 2020-2021 academic year increased 1.1% to $ 10,560 for out-of-state students at four-year public colleges, according to the College Council, which tracks trends in college prices and student aid… The data also showed that four-year private tuition fees rose 2.1% to $ 37,650.

Most students have to borrow to cover most of the cost, which has already led to staggering collective student loan debt in the United States. $ 1.7 trillion

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But new data suggests that freshmen entering this year will rely even more on loans to pursue degrees from a public college or university.

Usually seven out of ten college graduates graduate in red, according to the Institute for College Access and Success.

Going forward, according to a recent analysis of data from the National Center for Education Statistics NerdWallet, a high school graduate in 2021 could receive an average of up to $ 38,147 in student loans. That’s more than $ 37,200 for 2020 high school graduates.

The report takes into account that it now takes an average of five years to complete a four-year bachelor’s degree, given that more students are pursuing bachelor’s degrees. no more time

Even interest rates federal student loans are expected to rise by nearly one percentage point from July.

It will be increase monthly loan payments on a 10-year maturity of up to $ 99.99, up from $ 95.41 for every $ 10,000 of debt borrowed in the same academic year, according to higher education expert Mark Kantrowitz.

For those already grappling with the burden of student debt, President Joe Biden used his executive powers to renew suspend federal student loan payments until October.

About 43 million federal borrowers hope student loan mass forgiveness could be Biden’s next major step.

While the White House’s upcoming annual budget proposal will not include student debt forgiveness, the status of the proposal is still unknown.

“The fact that President Biden did not include student loan forgiveness in his budget request does not mean that student loan forgiveness will not happen,” Kantrowitz said.

Biden asked the U.S. Department of Justice and the U.S. Department of Education to issue a report on the limitations of his powers to write off student loans through executive action, and he is unlikely to take any action until he receives these findings, whether executive action or proposed legislation. added Kantrowitz.

The Department of Education also said The process of releasing new rules regarding student loan repayments and debt cancellation programs begins on Monday.

Meanwhile, the pause in payments gives borrowers a rare opportunity to pay off the balance of their loans or other high-interest debt, or send money to an emergency savings fund.

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