Senate Majority Leader Chuck Schumer, a Democrat from New York, speaks outside the U.S. Capitol in Washington during a press conference on student loan debt on Thursday, February 4, 2021.
Al Drago | Bloomberg | Getty Images
It remains uncertain whether there will be student loan waivers – and if so, how many borrowers’ loans will be canceled.
During the election campaign, President Joe Biden pledged to wipe out at least $ 10,000 for all borrowers and more for those attending public colleges or historically black colleges and universities.
However, amid the coronavirus pandemic, Biden is under increasing pressure from members of his own party, advocates and borrowers to go further by giving away $ 50,000 per person and doing it through action by the executive branch.
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“All you need is a wiggle of the spring,” Senate Supreme Democrat Senator Chuck Schumer of New York recently said of student debt forgiveness. “You don’t need a congress.”
Meanwhile, Senator Elizabeth Warren, D-Mass., Describes student debt relief as “the most effective economic stimulus available through executive action.”
More than 325 organizations and nonprofits, including the NAACP, the American Psychological Association, and the National Consumer Law Center, are also calling on Biden to cancel student debts through executive action. Nearly 1 million people have signed a Change.org petition, “President Biden: Cancel Student Loans In The First 100 Days”.
Many on the right argue that student debt relief would not boost the economy much, as college graduates tend to earn better and are likely to redirect their monthly payments towards savings rather than additional expenses. On the flip side, proponents point out that low-income borrowers, women, and people of color struggle the most with student loans – a pattern that has only exacerbated the pandemic.
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Although Biden has hesitated in the past to cancel student debt through executive action, White House press secretary Jen Psaki suggested earlier this month that the government had not ruled out the possibility.
“The president continues to support the cancellation of student debt to relieve students and families,” Psaki wrote in a February 4 tweet. “Our team is looking to see if there are any steps he can take through executive action and he would appreciate the opportunity to sign a bill that will be sent to him by Congress.”
It didn’t say how much of the debt the president was in favor of removing, but the implications would be very different.
$ 10,000 or $ 50,000
If all federal student loan borrowers were to cancel their debt at $ 10,000, the country’s outstanding education debt would drop from $ 1.7 trillion to around $ 1.3 trillion, according to college expert Mark Kantrowitz.
And a third of federal student loan borrowers, or 14.4 million people, would have their balances reset to zero.
Removing $ 50,000 for all borrowers, on the other hand, would reduce the country’s outstanding debt balance on student loans from $ 1.7 trillion to $ 700 billion.
Meanwhile, the $ 50,000 plan would cancel 80% of federal student loan borrowers, or 36 million people of all debts, Kantrowitz said.
Certainly there are a growing number of student loan borrowers who owe more than $ 100,000 and still have large balances even after a $ 50,000 forgiveness. However, either amount of debt relief – $ 10,000 or $ 50,000 – would clear the balances for the majority of borrowers who are struggling the most and have defaulted.
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source https://collegeeducationnewsllc.com/10000-50000-the-possibilities-for-student-loan-forgiveness/
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