Biden encourages fight to write off $ 50,000 in student loan debt, senior senator says
President Joe Biden campaigned on a promise to write off thousands of dollars in student loan debt for every borrower in the United States. There has been little movement on the subject, but the president has not completely killed the notion.
In fact, he gave words of encouragement to lawmakers pushing him to write off $ 50,000 in debt per person, according to new remarks from a senior US senator leading the crusade.
That’s even though Biden said he’d rather give $ 10,000 in loan forgiveness.
Those fighting for more generous relief say it would give Americans a more meaningful break from crushing student debt. Here is an overview of the situation.
Senior lawmaker continues to demand $ 50,000 in pardon
Senate Majority Leader Chuck Schumer and other supporters of sweeping student loan cancellation are stepping up pressure on Biden, in part, by highlighting the plight of thousands of Americans being held back by their student loans.
This week, at a virtual event hosted by the advocacy organization Student Debt Crisis, former students shared how they struggled with their student loans and lost opportunities to buy homes and cars, get married or invest for their future.
Christine Shea, a marriage and family therapist in Northern California, says she earned a master’s degree and $ 136,000 in student debt. After repaying $ 20,000, she says she now owes $ 4,000 more than the original amount.
“Over the years, the accumulation of interest has absolutely put me in quicksand,” says Shea.
Schumer, who spoke at the event, said he and Massachusetts Senator Elizabeth Warren met with the president on the matter and pledged to continue their relentless campaign for Biden to write off $ 50,000 in student debt. per borrower.
“We said, ‘We’re going to continue until you do this,’ and to his credit, he said, ‘Go ahead. He spoke about 10,000 – it’s not enough, ”says Schumer. “We keep the pressure on him.
Biden’s White House makes limited progress
Those who urge the President to take bold action are increasingly frustrated by the day.
Biden did not include forgiveness in his new spending bills or his $ 6 trillion budget proposal. He told a town hall earlier this year that he would not write off $ 50,000.
The cities are now joining the chorus of voices demanding a broad pardon. Washington, DC, Boston, Philadelphia and other municipalities have passed resolutions calling on the federal government to act on student debt cancellation.
Through an organization called Debt Collective, a union made up of members for debtors, more than 5,500 emails were sent to local representatives calling on them to support loan cancellation.
Biden’s Department of Education has so far said it is focusing on cleaning up existing federal student loan programs to make them easier on US debt holders.
In May, more than 50 lawmakers, mostly Democrats, urged Education Secretary Miguel Cardona to continue reforms to what they called a poorly managed program designed to help teachers, nurses and teachers. other public sector workers to obtain university debt relief.
Borrowers face a rude October awakening
About 45 million Americans share $ 1.7 trillion in student debt, according to Federal Reserve data. That’s about 1 in 5 adults in the United States
Senator Warren sees a grim scenario once a nationwide hiatus on student loan payments and interest ends in September. The average borrower, she says, will have to start paying back $ 400 per month to the government once the COVID-era moratorium is over.
“People will struggle. They’re going to miss the deadline, ”says Warren. “They are going to be delinquents. “
Many are hoping that a report from Secretary Cardona and the Justice Department will show Biden can write off $ 50,000 in student debt through an executive order – with a “stroke of the pen,” as Schumer put it. But we do not know when this decision will be rendered.
There hasn’t even been progress on Biden’s pledge to wipe out $ 10,000.
When asked at a new White House conference last week why the $ 10,000 student loan cancellation was not in Biden’s recently released budget, press secretary Jen Psaki said that the president would be “happy to sign a bill if he passed that bill.” And he would look forward to having it on his desk. “
Borrowers who need help now have a few options
If you are one of the millions who struggle to get ahead while paying off your student loans, there are many ways to improve your financial situation.
First, consider refinancing your student loans. Interest rates on private student loans have reached record highs, so a refinance loan could drastically reduce your monthly payment.
Note that refinancing a government loan would disqualify you from any federal student debt remission, if that happens.
Interest rates on mortgages have also fallen. If you own your home, you might consider refinancing at one of today’s great mortgage rates. Some 14.1 million homeowners still have the opportunity to save an average of $ 287 per month through a refi, mortgage data and technology company Black Knight recently said.
Finally, look for ways to increase your income without too much effort. A popular app helps you earn top-flight stock market returns simply by investing your “spare currency”.