Forbearance on federal student loans expires on January 31. Most borrowers will resume monthly payments on their outstanding balance by February. Depending on Biden’s re-election and other factors in the budget negotiations, certain borrowers may receive targeted assistance. Here’s where stuff stands now.
After his campaign for president, Biden has made canceling student loans a primary priority due to the Covid-19 pandemic. Biden tied student loan cancellation to Covid-19 during his campaign, saying he wished to support student loan borrowers who had been financially affected by the pandemic. Biden has consistently supported the cancellation of $10,000 in student loans for students affected by the Covid-19 pandemic. Since taking office, progressives in Congress have worked hard to reframe the debate around student loan forgiveness as part of a broader social agenda centered on promoting justice, eliminating inequalities, delivering stimulus, and improving consumer security.
For many, getting into debt to pay for it is the most intimidating part of attending college. College debt is always high, adversely impacting the potential of graduates to get ahead of their professional lives for years or even decades. It could be necessary to remove any or all of the student debt for those interested in a career in teaching or education through federal and state loan forgiveness programs.
In the US, 43 million persons of all ages carry debt from obtaining graduate degrees. After all, according to the Federal Reserve Bank of New York, the overall student loan debt hit 1,54 trillion in the first quarter of 2020. Obviously, for many, the figure is shocking – it’s more than the country’s entire credit card debt. These debts are still difficult for anyone to repay, in addition to being a lot of money: millions are defaulting on their student obligations, and more are failing to make strides on being free of student debt. Another Federal Reserve report in 2019 showed that “only about 36% of borrowers who were still on loan had reduced their balance in the last 12 months.”
