April 28, 2022

president biden considering student loan forgiveness

Meeting between House Democrats and President Biden turned out to be an interesting one for student loan borrowers. During meeting President Biden indicated that he is ready to cancel student loan debt for many borrowers.

Student Loan Forgiveness

Currently, there is a moratorium on student loan repayments, but it is going to end on August 31. It is believed that the borrowers this loan cancellation will target will be of middle and lower income category. During the mid-term elections such a move will turn out to be interesting selling point for the Democrats.

Democrats have long been arguing that higher education in the country should actually be inexpensive, similar to what we see in European nations. However, last year during interview with New York Times, President Biden said that he is not favorable to the idea of canceling student loan debt. But scenarios has changed now and according to White House officials, President Biden is expected to take a decision about the loan cancellation, before August 31, when the known moratorium is set to expire.

President Biden administration till date has canceled over 17 Billion of student loan for 700k borrowers in the form of targeted relief including borrowers who have been defrauded by their universities/colleges and those who are permanently disabled. President Biden did not reveal details of plans on how to cancel the student loans, but when lawmakers asked him about the same, He responded positively. President also indicated that he is willing to extend the moratorium past August 31st deadline.

This move can help lure young voters During November polls. But, it can also anger voters who have Never taken a loan or whoever already paid off the loan. Presently the loan moratorium Is helping 40 million Borrowers with a total of Student loan debt of 1.6 trillion And this is ninety percent of total student loan debt. That is outstanding!

If such debt cancellation does happen, it will certainly help minorities. Earlier, the Biden Administration took a significant move towards forgiveness of debt and this involved making the process simpler for lower-income loan borrowers and helped them easily qualify for debt cancellation through repayment plans that are based on income. According to these plans borrowers are allowed to continue paying off the loan at a certain percentage of the income for about 20 to 25 years and the balance loan amount is forgiven.