Student Loan Forgiveness: Will It Be $ 10,000 or $ 50,000? What you should know

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Sarah Tew / CNET

Student loan debt in the US is $ 1.71 trillionand is therefore in second place in consumer debt after residential mortgages. There have been calls from lawmakers to cancel some, if not all, debts, but that has yet to be done.

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President Joe Biden ran on canceling $ 10,000 in student loan debt, but some members of Congress want him to forgive $ 50,000 per student. Until now, however, Biden has not forgiven any debt across the board $ 1 billion in student loans defrauded by for-profit colleges was forgiven. It seems there is movement in Biden’s campaign promise.

Here’s what you need to know about student loan forgiveness.

What has Biden done for student loans so far?

During his presidential campaign, Biden called Forgive $ 10,000 in federal student loans per personHe also imposed additional plans for students in the Biden plan for education outside of high schoolsuch as free tuition and more money for federal scholarships.

Shortly after taking office Biden signed an executive order to extend the break on student loan repayments and interest until the end of September. Initially former President Donald Trump suspended payments at the beginning of the corona pandemic, and the suspension of the loan was extended two more times

In Biden’s American Rescue Plan, a provision removed any tax penalty if student loans are forgiven. The IRS handles debts that have been forgiven for less than what is owed taxable incomeThis would apply to both government and private loans. The forgiveness clause will last until December 25, 2025. As president, Biden has yet to formally forgive a student loan.

It is important to keep in mind that there has been no movement in loan forgiveness as there is one Growing number of crooks claiming they can help you forgive your loans

Can Biden forgive $ 50,000 in student loans?

At a CNN town hall in February, an audience member asked if Biden were to forgive $ 50,000 in student loans

“I’m willing to write off a debt of $ 10,000, but not $ 50,000,” said Biden. “Because I don’t think I have the authority to do it by signing the pen.”

It looks like Biden has changed his sentiment. On April 1, he asked Secretary of Education Miguel Cardona whether it is within the powers of the president to forgive $ 50,000 in student loans. The department has not yet published its findings.

Resource: www.cnet.com

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