Biden has written off nearly $ 10 billion in student loan debt so far. Who was relieved?
President Joe Biden has shown an appetite for helping American student loan borrowers.
The US Department of Education has just announced that it has approved $ 9.5 billion in student loan cancellations since January – easing the burden on 563,000 borrowers who now have more capacity to save, invest money and to face other debts.
If you haven’t paid attention, you may even be eligible for a portion of this student loan relief. But what happened to the idea of paying off the debt for each borrower?
The waves of student loans have been canceled
The Biden administration made announcements throughout the year as it forgave student loan debt for certain groups of borrowers.
Its most recent decision involved $ 1.1 billion in loan cancellation for 115,000 students who attended ITT Technical Institute and were misled by ITT Technical Institute before filing for bankruptcy in September 2016. .
“ITT’s embezzlement has diverted its financial resources from student education in order to keep the school in business for years longer than it likely otherwise would have, resulting in debts that are discharged from it. ‘today,’ the Education Department said Thursday.
The ministry’s press release also revealed that a total debt of $ 9.5 billion has been written off so far this year.
This amount includes:
Additionally, the Department of Education has suspended all student loan repayments, interest, and collections until January 31, 2022; and waived interest on student loans for 47,000 active and former members of the military.
Tens of millions of people still want loan forgiveness
But the administration’s debt cancellation to date is minimal compared to the total of $ 1.7 trillion in student loan debt currently carried by 45 million Americans.
During his presidential campaign, Biden said he would like to write off $ 10,000 in federal student loan debt for each borrower. Leading Democrats in Congress, including Massachusetts Senator Elizabeth Warren and Senate Majority Leader Chuck Schumer, have urged him to go further – by eliminating $ 50,000 per person.
Biden reportedly asked Education Secretary Miguel Cardona to determine whether a president can legally forgive large swathes of student debt through executive action. It was April, and there was no other word.
The President and Congress focused on other topics: infrastructure, Afghanistan, the pandemic. The House and Senate have approved $ 3.5 trillion in budget plans that will be supplemented by social spending, but so far the plans have not included any student debt forgiveness.
Supporters of widespread forgiveness claim that reducing student debt will benefit the US economy as a whole, as it frees up money that borrowers can spend on major purchases, like homes and cars; the launch of new businesses; and other investments in their future.
Other ways to settle your student debt
If your student loans weren’t wiped out by any of Biden’s Education Department cancellation measures, there are other ways to manage the debt while you wait for the president to act.
Interest rates on student loan refinances through private lenders are historically low at this time. Refinancing your student loan could significantly reduce your monthly payments. If a blanket forgiveness of federal loans ever materializes, it will not extend to refinancing loans from private lenders.
If you are a homeowner, now is a great time to consider refinancing your mortgage. With 30-year fixed mortgage rates currently averaging below 2.90%, mortgage technology and data provider Black Knight estimated that about 14 million homeowners could save an average of almost $ 300 per month by refinancing. .
If a student loan or mortgage refinance has piqued your interest, keep in mind that the best interest rates go to borrowers with the highest credit scores. Take a quick, free look at your credit score and see if there is a need to improve it before you start contacting lenders.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.