President Joe Biden has just canceled $ 1 billion of it student grants– and that’s how America responded.
Here’s What You Should Know.
Student loan cancellation is here, and the US Department of Education is just $ 1 billion in student loans canceled for 72,000 student loan borrowers. These student loan borrowers had previously canceled some student loans, but now get full student loan cancellation if they attend a school that engages in deceptive or illegal practices or has suddenly closed.
What do people think about this important decision to cancel student loans? Here’s a non-comprehensive, general cross-section of some of the social media feedback:
1. Biden cancels $ 1 billion in student loans – let’s celebrate
Many people on social media praised the decision to cancel $ 1 billion in student loans, saying it was an important step to tackle student loan cancellation. Student loan borrowers were hoping for financial relief, and they say Biden has kept his promise. Not only did Biden arrange for the cancellation of the student loan, but he did so in the first 100 days of his administration. Most importantly, this cancellation of the student loan is tax-free to student loan borrowers. The new stimulus package makes forgiveness of student loans tax-free until December 31, 2025.
2. Student loan cancellation – this is just the beginning
Congress may cancel student loans more than once. While some borrowers applauded the decision to cancel student loans, others viewed this student loan cancellation as just the first step in a larger student loan forgiveness process. They see this announcement as a possible precursor to Biden cancels student loans by executive order whether Congress cancels student loans through legislation. Whether the amount of the student loan cancellation is $ 10,000, $ 50,000, or some other amount, this group views this student loan cancellation as just the beginning of a broader plan to resolve student loans.
3. Student loan cancellation – this only helps some borrowers
Another group of people on social media criticized Biden’s cancellation of student loans. Why? While they acknowledged the size of the $ 1 billion headline number, they said the actual amount of student loan forgiveness pale in comparison to both the amount of outstanding student loan debt and the total number of student loan borrowers. For example the latest statistics on student loan debt show that 45 million borrowers collectively owe $ 1.7 trillion in student loans. On a percentage basis, $ 1 billion in student loan forgiveness equates to 0.06% of all outstanding student loans. Likewise, 72,000 student loan borrowers benefit about 0.2% of all student loan borrowers. So this group of people is not particularly impressed with this last step for canceling student loans.
4. Will my student loans be canceled?
A fourth group of people asks: “Will my student loans be canceled?“Some of these student loan borrowers went to schools that were closed, while others say their university cheated on them. If your school has misled or engages in unlawful deceptive practices, you may be able to get student loan forgiveness for some or all of your federal student loan debt. You can apply for student loan cancellation under borrower defense forgiveness of student loan repayment.
5. Biden cancels $ 1 billion in student loans, but taxpayers will pay
A final group of people on social media say this student loan cancellation is an unfair asset transfer that the taxpayer takes into account. They say that canceling student loans is not free; it is funded by taxpayers. Some social media users wonder why taxpayers need to save student loan borrowers who made bad decisions about going to college for profit, for example. (A response from several social media users: Congress has rescued large corporations. Why not forgive individual borrowers in financial distress?). Others ask why there should be large-scale student loan forgiveness for some borrowers, while millions of other borrowers have paid off their student loans properly by making financial sacrifices and, in some cases, having multiple jobs. They say there are several reasons why student loans should not be canceled and they don’t want taxpayers to pay for student loan forgiveness if the vast majority of Americans don’t have a student loan or attend college.
Forgiveness of Biden Student Loan: Now What?
This may not be the only student loan forgiveness that will occur during the Biden administration. Congress and the president are both considering forgiveness of student loans on a grand scale. Importantly, this $ 1 billion student loan cancellation is different from the large-scale student loan cancellation that could potentially affect millions of student loan borrowers. The borrowers affected by this major student loan announcement are a select group of people who have received partial student loan forgiveness, but Biden wants to heal these borrowers through borrower defense to repayment and also cancel the rest of their federal student loans. The debate to cancel student loans for more student loan borrowers will continue. Therefore don’t expect a large-scale cancellation of student loans now. However, don’t expect all 45 million borrowers to be forgiven for student loans or for all their student loans to be forgiven. It is more likely that Congress will limit who qualifies, how much student loan forgiveness there will be, and when the student loan cancellation can occur. If Congress, in lieu of the president, cancels student loans, progressives in Congress will have to introduce a student loan bill that can support moderate Democrats. Make sure to create your own student loan plan as there is no guarantee that your student loans will be canceled. Here are some possible options to consider:
Student Loans: Related Reading