President Biden said he’ll make his much-anticipated student loan forgiveness announcement in a few weeks. That’s fine, because we do the same thing.
So while we wait, let’s look at what Biden will do on this politically charged, $1.7 trillion issue.
Forget about $50,000. The president said he’s “thinking about” cutting back on debt, but he made it clear that it won’t be $50,000 per borrower that progressives were pushing for. Biden said that each borrower should get $10,000 in help while he was campaigning at drive-in rallies. Most of the 40 million people who owe money for college would be free of their debt if this were to happen.
He could change the way he makes money. Biden has been wary of broad student debt relief in the past, and his advisers have talked about focusing forgiveness on people who make less than $50,000 a year. A few weeks ago, the Department of Education said that it would make major changes to its income-driven repayment (IDR) plans, which were supposed to help low-income people pay off their loans more quickly.
Make sure to look at scam schools. This week, the Biden administration paid back $238 million in loans that were given to students who went to the Marinello Schools of Beauty. That shows how much attention Vice President Biden has put on updating the borrower defence programme and making it easier for groups of students who were defrauded by for-profit schools to apply for loan forgiveness, which is what he wants to do. There have been changes to this programme that have forgiven $18.5 billion in student debt, but only $2 billion of that comes from changes that have been made since Biden took office.
This is how you zoom out: He extended the pause on federal student loan payments until August 31, which is the end of the month. 37 million people have been able to save $195 billion in loan payments since that moratorium was put into place in spring 2020, according to the NY Fed, which runs the NY Fed. But when the rule is over, the bank thinks that delinquencies will go up a lot.