President Joe Biden has shown that he wants to help US student loans.
The U.S. Department of Education just reported that it has approved $9.5 billion in student loan waivers since January — easing the burden on 563,000 borrowers who now have greater opportunities to save more, invest more money, and deal with other debts.
If you haven’t been paying attention, you may even qualify for some of that student grant. But what happened to the idea of getting rid of debt before? every borrower?
Waves of student loans have been canceled
The Biden administration has been making announcements throughout the year as it canceled student loan debt for select groups of borrowers.
The most recent move was $1.1 billion in loan waivers for 115,000 students who attended and were misled by the ITT Technical Institute before filing for bankruptcy in September 2016.
“ITT’s misdemeanor left the funds available for educating students to run the school for years longer than it likely would have otherwise been, resulting in debt being forgiven as of today,” the ministry said. of Education Thursday.
of the department press release also revealed that a total of $9.5 billion in debt has been forgiven so far this year.
That amount included:
In addition, the Department of Education has halted all student loan repayments, interest, and collections through January 31, 2022; and has waived interest on student loans for 47,000 current and former active-duty military personnel.
Tens of millions still want loan forgiveness
But the government’s debt cancellation to date is small compared to the total $1.7 trillion in student loans currently borne by 45 million Americans.
During his presidential campaign, Biden said he would like to cancel $10,000 in federal student loans for each borrower. Notable Democrats in Congress, including Massachusetts Senator Elizabeth Warren and Senate Majority Leader Chuck Schumer, have urged him to go bigger — wiping out $50,000 per person.
Biden has reportedly asked Education Secretary Miguel Cardona to determine whether a president can legally cancel large chunks of student debt through executive measures. That was in April, and nothing else has been said.
The president and Congress are focused on other things: infrastructure, Afghanistan, the pandemic. The House and Senate have approved budget blueprints of $3.5 trillion that will be filled with social spending, but so far the plans do not include student debt forgiveness.
Proponents of widespread forgiveness say lower student debt will benefit the U.S. economy as a whole, as it will free up money for borrowers to spend on major purchases, such as homes and cars; the launch of new companies; and further investments in their future.
Other ways to deal with your student debt
If your student loans haven’t been eliminated by one of the Biden Education Department’s cancellation moves, there are other ways you can manage the debt while you wait for the president to act.
Interest rates for student loan refinancing through private lenders are currently at an all-time low. Refinance your student loan can significantly reduce your monthly payments. If there ever comes a broad federal loan waiver, it will not extend to refinancing loans from private lenders.
If you own a home, now is an excellent time to consider refinancing your mortgage. With 30 years fixed mortgage interest currently on average less than 2.90%, mortgage technology and data provider Black Knight estimates that about 14 million homeowners could save nearly $300 a month on average by refinancing.
If a student loan or mortgage review has piqued your interest, keep in mind that the best interest rates go to borrowers with the highest credit scores. take a quick, free check of your credit score and see if there is any need to improve it before contacting lenders.
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This article provides information only and should not be construed as advice. It comes without any kind of warranty.