Stock Groups

Administration signals student loan forgiveness decision may come soon


On April 1, 2022, President Joe Biden speaks from the State Dining Room at the White House about the March jobs report.

Getty Images News | Getty Images News | Getty Images

Many of the tens of million Americans who are enslaved by student loans will soon hear what, if any, the Biden administration is doing to help them.

At Monday’s press conference, Jen Psaki, White House Press Secretary said that “not a single individual in this country has ever paid any dime on federal students loans since the President took office.”

Elle continued by saying that President Joe Biden would make a decision on any student loan cancellation before that student loan pause was over.

This pandemic-era relief, which suspends bills from being paid has been in force for almost two years. It’s scheduled to end on Aug. 31.

Learn more about Personal Finance
More Americans feeling cash-strapped as inflation spikes
What to do if you missed the April 18 tax filing deadline
Here’s how to get the most money towards college

Even before the public health crisis, repayment troubles were common among student loan borrowers.

It was estimated that the country’s education debt balance surpassed $1.7 trillion. This was a greater burden than either credit cards or auto loans and placed a heavier financial burden on households. Roughly a quarter of student loan borrowers — or 10 million people — were estimated to be in delinquency or default.

Experts believe that the economic fallout from the crisis in public health has only exacerbated the already dire situation. Recent research found that student loan borrowers surveyed reported an increase in debt. 16%There is a possibility of missing payments quickly if there was a payment pause.

Biden, however, has expressed skepticismAnother development suggests that he might be open to the possibility of granting student loans forgiveness, as a result of his recent comments.

The president stated that he is currently seeking to cancel student loans when the subject was brought up by the Congressional Hispanic Caucus. accordingTo multiple reports.

Advocates and Democrats have been pressing the president to take action before the midterms. They point out that cancelling student loans is something he could deliver on as a campaign promise, and that much of his agenda was blocked by Congress.

Some lawyers are still debating whether the president is authorized to forgo debt by executive action.

Opponents of student loan cancellation argue that the policy makes taxpayers pay for students who have benefited from higher education, and it is unfair to Americans who did not attend college or who never borrowed money.

Advocates say that because of the increasing cost of college students have little option but to borrow money if they are to find a good paying job. They also point out that women and minorities suffer the greatest from the loan system. Women hold two-thirds federal student loan debt.

Around 70%A recent Federal Reserve Bank of New York study found that students who are in lower-income or middle-income areas would receive $50,000 of debt relief.