Student loan forgiveness Biden
President Joe Biden has now canceled around $40 billion of student loans. That’s not a typo.
Here’s what you need to learn
Student loan forgiveness Biden
In the continuous debate about student loan cancellation, here’s a fact that may come as a surprise: Biden has now canceled around $40 billion of student loans since becoming president in January. Here’s the breakdown:
Biden canceled around $3 billion of loans, Student loan forgiveness Biden
Biden has now canceled around $3 billion of student loans through direct student loan cancellation.
First, Student loan forgiveness Biden authorized nearly $1 billion of student loan cancellation for 72,000 student loan borrowers.
Second, Student loan forgiveness Biden canceled another $1.3 billion of student loan forgiveness Biden for around 41,000 borrowers with a total and continual disability.
Third, Student loan forgiveness Biden canceled around $500 million of student loan debt for around 18,000 student loan borrowers under the borrower security to student loan repayment rule.
Last week, Student loan forgiveness Biden canceled around $55.6 million of student loans, meaning Student loan forgiveness Biden has canceled around $1.5 billion of student loans this way.
To date, this has been targeted at student loan cancellation that has influenced specific student loan borrowers to right a particular wrong under existing law or rules. However, this is various from the wide-scale student loan cancellation that Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) are dragging Biden to enact through executive order.
They want Student loan forgiveness, Biden, to cancel around $50,000 of Student loan forgiveness Biden, student loans per borrower on a wide-scale basis (if you earn less than $125,000 and for national student loans only). However, Student loan forgiveness Biden has enacted at least some wide-scale student loan cancellation — and it’s been around $40 billion.
How Student loan forgiveness Biden canceled around $40 billion of student loans
In March in the year 2020, Congress passed the Cares Act, a $2.2 trillion stimulus package that provided, among other benefits, student loan relief. That student loan relief granted federal student loan borrowers the following through September 30, in the year 2021:
no federal student loan payments;
0% interest on federal student loans; as well as
no collection of defaulted student loan debt.
If you’re a national student loan borrower, this is all too familiar. Through September, student loan borrowers will have admired around 18-month hiatus from compulsory student loan payments. Without an extension, federal student loan payments will restart beginning October 1. Student loan forgiveness Biden may expand student loan relief, even if unemployment benefits and the eviction moratorium end. However, there is another main dilemma if Student loan forgiveness Biden expands student loan relief.
Regardless of whether Biden extends this student loan relief, Student loan forgiveness Biden extended through an executive order this student loan relief already from January 31, in the year 2021, to September 30, in the year 2021. That decision alone canceled around $40 billion of student loan debt for student loan borrowers. According to the U.S. Department of Education, the temporary student loan forbearance has saved student loan borrowers around $5 billion per month.
By not spending federal Student loan forgiveness Biden and having no new interest accrual on their balance, student loan borrowers effectively got around $5 billion a month of student loan cancellation. President Donald Trump also broadened this student loan relief from October 1, the year 2020, to January 31, 2021, which also canceled around $20 billion. If you add the period from March in the year 2020 to September in the year 2020, the total amount of student loan cancellation is around $90 billion.
Is this a student loan cancellation?
Some may assert that this isn’t student loan cancellation. Student loan cancellation, in their view, is akin to around $3 billion of student loan cancellation that the Student loan forgiveness Biden administration canceled immediately. They may say that saving money on interest payments isn’t the same because it doesn’t feel like there was any tangible reduction in their student loan balance.
However, there are two ways to think regarding student loan cancellation. The first is the cancellation of your principal student loan balance, which is how much total money you presently owe. This is the student loan cancellation of around $10,000 or $50,000.
The second is a cancellation of future interest on that balance. The Warren-Schumer plan would accomplish the cancellation of prevailing student loan debt, which, for any student loan borrowers with a remaining student loan balance, effectively also would cancel some future student loan interest since income would accrue on a smaller student loan balance.
That said, Student loan forgiveness Biden’s decision to broaden temporary student loan forbearance which resulted in around $5 billion of savings each month — is another form of student loan cancellation. Why? While their student loan balance wasn’t decreased, student loan borrowers saved that money directly as well as won’t have to reimburse those savings.
Greatly, this student loan cancellation doesn’t preclude any future cancellation, either on a wide-scale or targeted basis. Student loan forgiveness Biden, Biden, or Congress can still cancel student loans up to around $10,000 or $50,000, or an alternative number.
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However, it’s significant to note that Biden has canceled around $40 billion of student loan debt since coming to be president, and student loan borrowers will get around $90 billion of student loan cancellation by September 30, the year 2021. Whether that’s too much, too little, or just enough student loan forgiveness, eventually, is up to the president and Congress.
Reason for Student Loan Forgiveness Biden
Around $6 billion in student loan forgiveness is part of a solution to a problem that’s been festering for a long time—predatory for-profit schools that vacated their students in worse-off positions than if they hadn’t attended as well taken out loans.
Back in 2010, the U.S. Government Accountability Office (GAO) sent people undercover to 15 for-profit colleges and found that around 15 colleges made deceptive or otherwise questionable statements to the applicants. Four colleges motivated applicants to engage in fraudulent practices, such as lying on federal aid forms.
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In the year 2019, 264,000 borrowers banded together and sued the Department of Education, hoping to take advantage of a federal program called “borrower security to repayment.” While the Sweet v. Cardona settlement assures 200,000 borrowers will no longer have to pay their loans and get back the money they paid, an extra 64,000 claimants are still having their cases reviewed.
The borrower defense to repayment program gives students the benefit to get their money back, only if there’s hard proof that they were deceived. So if you thought you had lousy teachers or barely didn’t get the education you were hoping for, that’s uncertain to be enough to get your federal student loan debt erased.
This settlement was just one of various instances of student loan forgiveness to make the news this year. Earlier this month, the Biden administration eliminated around $6 billion in loans for around 580,000 borrowers who attended Corinthian Colleges, which was shut down in the year 2015. Among other things, the for-profit education institution was impeached for deceptive marketing to students and lying to the government regarding its graduation rates.
In that case, borrowers weren’t accountable for a ripping tax bill. Frequently, when debts are forgiven, you still have to pay taxes on them, since it’s dealt with as “income.” But the IRS didn’t recognize the borrowers’ forgiven debt as income, and it appears likely that they won’t in this case either.