Student Loan Forgiveness Would Eliminate This Much Student Debt

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Student loan forgiveness will eliminate this student loan.

Here’s what you need to know – And what this means for your student loans,

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President Joe Biden could decide the future of student loan forgiveness within weeks. The White House has denied that Biden has decided to cancel $10,000 student loans for borrowers. While Biden has said he will announce his decision soon, there is no clear indication of how much student loan debt Biden will cancel or if he will cancel any broad student loans. If Biden cancels more student loans, how much could it end?

1. Biden cancels $10,000 student loan

If Biden cancels student loans on a large scale, expect $10,000 in student loan forgiveness. Why? It’s the amount of student loans that Biden has referred to consistently since running for president in 2020. While Biden has consistently called on Congress to pass legislation to cancel student loans, the US Senate largely did not even vote on student loans. Forgiveness. $10,000 student loan forgiveness, according to the Federal Reserve would like,

  • Forgive federal student loans totaling $321 billion;
  • liquidating entire balances for 11.8 million borrowers;
  • Cancel 30.5% of student loans in student loan delinquency or student loan default before the Covid-19 student loan payment break; And
  • The average student loan borrower will receive $8,478 in student loan forgiveness.

2. Biden cancels $50,000 student loan

Alternatively, Biden could offer a summer surprise and cancel a $50,000 student loan for borrowers. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY), Biden has never supported the cancellation of a $50,000 student loan. That said, progressive Democrats in Congress are pushing for a renewed push to cancel a $50,000 student loan for Biden. $10,000 student loan forgiveness, according to the Federal Reserve would like,

  • Forgive a total of $904 billion in federal student loans;
  • eliminating the entire federal student loan balance for 29.9 million borrowers;
  • 77% of student loan delinquencies or student loan default cancel student loans before Covid-19 student loan payment breaks; And
  • The average student loan borrower will receive $23,856 in student loan forgiveness.

(The U.S. Department of Education estimated that $50,000 student loan cancellation would wipe out the entire federal student loan balance for 36 million student loan borrowers, which is higher than the Federal Reserve estimates).

3. Biden Cancels More Student Loan Debt

Biden, who has canceled a $25 billion student loan, can choose any amount other than $10,000 or $50,000 of student loan debt. That said, he is unlikely to cancel all student loans, as proposed by Sen. Bernie Sanders (I-VT). The Biden administration has also issued an income cap of $150,000 per borrower, which could limit who qualifies for student loan forgiveness. Biden could adjust this potential income cap up or down, or as some proponents have urged, or eliminate the income cap so that all federal student loan borrowers qualify for student loan forgiveness.

Student Loans: Next Steps

Biden has not released any formal plans on wide-scale student loan forgiveness. Therefore, there is no guarantee as to how much student loan forgiveness can be expected. That said, $10,000 can be considered a base case. Critics say that massive student loan forgiveness is a terrible idea for at least 5 reasons. For example, with high inflation and the threat of recession, Biden could massively cancel student loans if voters think it could lead to inflation. Temporary student loan relief expires on August 31, 2022, and Biden can wait until then to announce his decision on student loan forgiveness. With student loan relief coming to an end, now is the time to evaluate all your options for paying off student loans. Here are some popular ways to pay off student loans faster:

Student Loans: Related Reading

Senators propose major changes to student loan forgiveness

Education Department announces major changes in student loan service

Navient agrees to cancel $3.5 million student loan

How to Qualify for $17 Billion Student Loan Forgiveness

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