(Washington Insider Magazine)-President Biden is expected to cancel billions of dollars in his most recent update to the federal student loan relief plans, which could help to reduce the financial burden for thousands of students across the nation.
Though student loan relief is an important initiative for the president, no real progress has been made regarding the legislation which has led to pressure from some democrats for Biden to take further action.
Currently, drafted legislation states that $10,000 of student debt could be forgiven for each borrower should the legislation be enforced–though the exact number of student debt forgiveness options and cost allocations have yet to be confirmed by congress.
The potential bill would be a lifeline for a number of former and current students struggling to pay off their student loans.
That said, not all borrowers will directly benefit from student debt forgiveness under the new law. With this in mind, here’s a rough estimate of how the bill is said to work and who it will impact:
Data from the education department suggests that as of March 2022, over 45 million borrowers have federal student loans. This includes parents who are paying for their children’s college education and 30 of Biden’s senior staff.
Though Biden’s administration has yet to establish the final details of this proposal, it’s understood that it will aim to help both current and former students including college drop-outs. Knowing this, it’s estimated that 15.2 million borrowers could expect up to $10,000 in debt forgiveness.
While some progressive democrats have called for larger amounts of debt forgiveness, Biden has said that he would not forgive debts up to $50,000.
Despite slow progress, Biden has begun to take serious action in ensuring that student debt forgiveness is enforced across the U.S. For instance, on his first day in office, he made the decision for the department of education to freeze federal student-loan payments and to keep the interest rate at 0%.
Biden first froze the payments back in 2020 in an attempt to relieve the financial burden for those who had been impacted by the pandemic, however, this rule does not apply to private student loans.