Writing off much of the government’s student loan debt appears to be just around the corner after Joe Biden’s November election victory.
Four months later, Biden is still forced to fulfill the campaign’s promise to forgive $ 10,000 federal student loans to each borrower.
Meanwhile, as early as next week, an answer to a more serious question may appear: does the president have the power to destroy five times more student debt. It would give millions of Americans much lower overall debt burden…
But in a new interview, Biden is more skeptical about writing off the $ 50,000 per person student loan debt, which is the goal of several Democrats in Congress. And the White House’s forthcoming budget report says that $ 10,000 may not yet be offered.
Over 1 Million Student Loan Benefit Applications
More than 100 online petitions related to federal student loan forgiveness are currently collecting many signatures. The biggest one, on Change.org, has over 1 million subscribers, and he asks Biden to cancel everything federal student loans.
While this is definitely a turnaround for fences, it reflects the financial struggles familiar to many of the more than 43 million student loan borrowers in the country who carry average balance $ 38 792, according to credit bureau Experian.
Before the pandemic, 80% of Americans with federal student loans “either couldn’t pay or paid, but their balances were growing,” writes Alan Collinge, who petitioned and founded a group called Student Loan Justice in 2005.
Recent research the renowned think tank Brookings Institution has studied the financial implications of student debt write-offs at various levels. Research has shown that the more forgiveness, the more financial stability increases.
“Setting the amount of student debt forgiveness at a level where the average debt holder is forgiven for more than a quarter of their debt can lead to significant changes in savings behavior, investment in human capital (such as returning to school) and starting a business without making large changes in labor supply, ”the study authors say.
You must answer the question in the amount of US $ 50,000.
Society and the economy will benefit if Biden cancels student loan arrears of up to $ 50,000 per borrower, Senate Majority Leader Chuck Schumer and other Congressional Democrats, who are pushing the president to do so, say.
“Canceling student debt is the only thing we can do right now to kickstart our economic recovery, help create long-term economic opportunity and close the racial wealth gap,” Schumer said in a recent fundraising campaign. Hill…
In early April, the White House said the president had asked his education secretary, Miguel Cardona, to find out if Biden had the right to write off up to $ 50,000 in student loans. Considering that more than seven weeks have passed, it is reasonable to think that the verdict will be delivered soon, maybe even within a few days.
But borrowers may be reluctant to overestimate their expectations. In a new interview, the president makes it clear that he does not want to overly generously write off student debt.
“The idea that you go to the University of Pennsylvania and pay a total of $ 70,000 a year and the public has to pay for it? I disagree, ”says Biden in interview with David Brooks from New York Times…
Meanwhile, Washington Post reports that the White House budget plan, which is due for release next week, does not even include $ 10,000 in debt cancellation per borrower, as Biden proposed during his campaign.
What if student debt cancellation never happens? Do it yourself
While it seems that Biden still wants to cancel at least some of the federal student loans, who can tell when it might happen and how far will he go? In the meantime, there are many ways to improve your financial situation if you are drowning in student loan debt.
If you haven’t looked into this yet, consider refinancing your student loans. Interest rates on refinancing loans from private lenders are at an all-time low, according to the Credible loan market.
Refinancing could significantly reduce your monthly payment…
But remember that refinancing a federal student loan to a private one will disqualify you if federal loan forgiveness ever becomes a reality.
If you are a homeowner saddled with student debt, consider refinancing your mortgage to ease your financial burden. Now that mortgage rates have dropped again, mortgage technology and data provider Black Knight says 13 million homeowners can save on average $ 283 per month through refinancing…
After you cut your debt, you can make more income by making a small investment in the stock market – and it won’t even cost you that much. One popular app helps you build a diversified portfolio using little more than yours “Trifle” from everyday purchases…