Here’s how many student loan borrowers could get student loan forgiveness if President Joe Biden enacts wide-scale student loan relief.
Here’s what you need to know — and what it means for your student loans.
As Biden mulls the prospect of broad student loan forgiveness, student loan borrowers anxiously await their fate. Will Biden cancel student loan debt? Biden has three important decisions on student loans to make in the coming weeks. If Biden proceeds with student loan cancellation for millions of student loan borrowers, here’s how many student loan borrowers could get total student loan forgiveness.
Student loan forgiveness: how many student loan borrowers get student loan cancellation
According to the latest student loan debt statistics, 45 million student loan borrowers collectively owe $1.7 trillion of student loan debt. To date, Biden has canceled more than $25 billion of student loans for more than 1 million student loan borrowers. There has been speculation that Biden could cancel $10,000 of student loans per student loan borrower. However, progressive members of Congress are still pushing Biden to support $50,000 of student loan cancellation. If Biden cancels federal student loans only, here’s how many student loan borrowers would get their student loans canceled:
- $10,000 of student loan cancellation: 15+ million borrowers;
- $20,000 of student loan cancellation: 24+ million borrowers;
- $30,000 of student loan cancellation: 30+ million borrowers;
- $40,000 of student loan cancellation: 33+ million borrowers; and
- $50,000 of student loan cancellation: 36 million borrowers.
Student loan cancellation: who qualifies
You may be wondering who could qualify for student loan forgiveness. The Biden administration hasn’t established any guidelines for potential broad student loan forgiveness. Biden could limit student loan forgiveness for borrowers in several ways. In addition to canceling federal students only, Biden could impose an income limit to qualify for student loan forgiveness. For example, the Biden administration proposed a $150,000 income limit for individual student loan borrowers to be eligible for potential wide-scale student loan forgiveness. Some supporters of student loan cancellation have urged Biden to remove any income qualifier. Others have argued the income limit is too high, citing the $75,000 income threshold used for stimulus checks in response to the Covid-19 pandemic. Biden also could restrict which types of federal student loans qualify. For example, Biden could exclude FFELP student loans and Perkins student loans from student loan cancellation. Limiting who qualifies for student loan relief could result in fewer student loan borrowers getting student loan forgiveness and, therefore, would lower the overall cost to the federal government.
Student loans: next steps
With 3 important deadlines for student loans approaching, Biden said he plans to announce his decision on student loan forgiveness likely in July or August. That means student loan borrowers will be in limbo regarding the future of their student loans. At the same time, Congress has proposed 0% interest on student loans, while Biden has proposed to lower interest on student loans. That said, student loan borrowers can plan now for the restart of student loan payments on September 1, 2022. Invest the time to explore every possible option for student loan repayment. Biden is unlikely to cancel all your student loan debt or, for many student loan borrowers, even most of your student loan debt. It’s also possible that at least some of your student loan debt won’t qualify for any student loan cancellation. Here are some popular ways to save money and pay off student loans faster:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)
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