Student Loan Debt Forgiveness: Will President Biden Cancel It?

The Biden administration is expected to make an announcement soon on a possible student loan forgiveness.

TEXAS, USA — Congratulations on graduation. But sorry for all the IOUs attached to it.

Borrowing to pay for education has set college and university students and graduates in this country in a class of their own. Their collective $1.59 trillion student loan debt is more than Americans owe for auto loans, and it’s almost double the total national credit card balance.

Many people have taken out student loans in search of a better future, but that can fade dramatically when they realize that the average student debt (at an average interest rate of 6%) includes $26,000 of interest that accrues over the 20 years it takes the average school loan to pay off.

But for millions of Americans, a glimmer of hope has returned with recent talk that President Biden could forgive some student loan debt. But for some, optimism has faded again with the possibility that the president could forgive “just” $10,000 in student loans per borrower. This is much less than many people claim; in fact, the title citing a borrower was “Cancel all or do nothing‘.

Many Texans with student loan debt might show up to debate class to discuss that one.

Analysis found that 1,157,540 Texans would have their federal school loan debt totally forgiven if $10,000 per borrower were forgiven. The analysis also found that nationally, canceling this amount would completely wipe out the debt of one-third of all Americans who owe federal student loans.

There have been many reports on what could happen. We’ll see if it’s $10,000 or $50,000…or if there’s no broad forgiveness at all. Most reports focused on waiting for the president to make an announcement in Julyor more likely, in August.

This moment would make sense. Due to the pandemic, interest ceased to accrue and payments on federal student loans were suspended on March 13, 2020. From September onwardsborrowers will have to start repaying their student loans again.

Additional note: The pause in student loan repayments means there has been no chance for borrowers to miss payments or become delinquent, and this has improved some borrowers’ credit ratings. You can receive free credit reports to check your score here.

There are some important details to know concerning the resumption of reimbursements. For most borrowers, the interest rate will be the same as before the pause in payments.

If you have already paid by direct debit, you may need to re-register for these direct debits to start again. And if you can’t afford to start paying your monthly amount again, you should talk to your loan officer now or ask for an income-based repayment plan.

This article contains other useful tips on the repayment of student loans.

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