Will President Biden Cancel Student Loan Debt?
NEW YORK, April 23, 2021 (Newswire.com) - President Joe Biden has had some ambitious goals for his first 100 days in office. He recently doubled his goal for COVID-19 vaccines administered by April 30 from 100 million to 200 million, moved up his deadline to make all U.S. adults eligible for the vaccine from May 1 to April 19, and introduced a detailed $2 trillion infrastructure plan.
But there's still plenty left undone, ranging from gun control reform to corporate tax cut reversals.
A major talking point (and we don't mean the presidential dog) is whether Biden will be able to forgive student loan debt, and if he does, will it be more than the $10,000 for all borrowers that he initially promised?
The COVID-19 effect on student loan debt
As it has with just about every facet of life, COVID-19 has had an impact on student loan debt. The office of Federal Student Aid issued temporary relief on federal student loan debt, including the suspension of loan payments, 0% interest rate, and stopped collections on defaulted loans on March 20, 2020. The relief has been extended several times and now runs through at least Sept. 30, 2021.
That means some borrowers could go as much as a year and a half without having to pay their student loan debt and/or interest.
Student loan debt by the numbers
In some ways, the coronavirus has helped borrowers, but from an overall perspective, it's pushed student loan debt to new levels.
Student loan debt in America reached a record high of $1.7 trillion in February. That's split among nearly 45 million borrowers for an average of almost $38,000 per person. Student loan debt is now higher than credit card and auto loan debt and is second only to home mortgage debt in the U.S.
About 15.3 million borrowers have $10,000 or less in student loan debt, so if that amount is forgiven, about one-third of those with student debt would be off the hook.
If you're one of the 2.4 million borrowers with private student loan debt, though, you won't get the full benefits of Biden's loan forgiveness. In that case, you may want to consider a personal loan for debt consolidation to potentially lower your interest rate and repay your debt more quickly.
How much student loan debt will Biden cancel?
"Cancel culture" is always a popular topic of controversy, but canceling student loan debt is the type of cancelation we can all get behind. Right? There are still people who disagree? Ugh.
As early as last March—before he even became the Democratic nominee—Biden said he supported forgiving a minimum of $10,000 per person in federal student loan debt, and his administration has continued to say he's on board with canceling that amount through Congressional legislation.
But White House Chief of Staff Ron Klain said recently that Biden is looking into whether he'd have the "legal authority" to cancel up to $50,000 per person in student loan debt through executive action, and Press Secretary Jen Psaki said Biden's still weighing his options around canceling student loan debt.
Let's get past the malarkey and start building back better.
Source: Credello
