Student Loan Debt Forgiveness: Will President Biden Cancel It?

The Biden administration is expected to make an announcement soon on a possible student loan forgiveness.

TEXAS, USA — Congratulations on graduation. But sorry for all the IOUs attached to it.

Borrowing to pay for education has set college and university students and graduates in this country in a class of their own. Their collective debt of $1.59 trillion in student loans is more than Americans owe for auto loans, and that’s nearly double the total national credit card balance.

Many people have taken out student loans in pursuit of a better future, but that can fade dramatically when they realize that the average student debt (at 6% average interest) includes $26,000 of interest that accumulates over the 20 years that the average school loan takes. pay.

But for millions of Americans, a glimmer of hope has returned with recent talk that President Biden could forgive some student loan debt. But for some, optimism has faded again with the possibility that the president could forgive “just” $10,000 in student loans per borrower. This is much less than many people claim; in fact, the headline quoting a borrower was “Cancel all or do nothing”.

Many Texans with student loan debt might show up to debate class to discuss that one.

An analysis found that 1,157,540 Texans would have their federal school loan debt wiped out entirely if $10,000 per borrower were forgiven. The analysis also found that nationally, canceling this amount would completely wipe out the debt of one-third of all Americans who owe federal student loans.

There have been a lot of reports about what could happen. We’ll see if it’s $10,000 or $50,000…or if there’s no broad forgiveness at all. Most reports have focused on the expectation that the president will make an announcement in July, or more likely August.

This moment would make sense. Due to the pandemic, interest stopped accumulating and payments on federal student loans were suspended on March 13, 2020. Beginning in September, borrowers will again have to begin repaying their student loans.

Side note: The pause in student loan repayments has meant there has been no chance for borrowers to miss payments or become delinquent, and it has improved some borrowers’ credit scores. You can get free credit reports to check your score here.

There are a few important details to know about resuming refunds. For most borrowers, the interest rate will be the same as before the pause in payments.

If you have already paid by direct debit, you may need to re-register for these direct debits to start again. And if you can’t afford to start paying your monthly amount again, you should talk to your loan officer now or ask for an income-based repayment plan.

This article contains more helpful tips on student loan repayment.

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