Biden Announces Student Loan Forgiveness Plan to Mixed Reactions
President Joe Biden announced his administration’s long-awaited student loan forgiveness plan Wednesday, saying it will forgive $10,000 in student loans for borrowers who earned less than $125,000 during the pandemic. People who received Pell Grants, grants to low-income students, while they were enrolled in college will be eligible to have $20,000 in debt forgiven, reports Vox.
The move will be enough to wipe out some student debt entirely: 15 million of the 43 million people with federal loans owe less than $10,000, and those borrowers are typically the most likely to fail to pay back their loans. In all, the plan will eliminate student debt for about 20 million people, according to an analysis provided by the Education Department, and decrease monthly payments by an average of $250 for borrowers with a remaining balance who are on standard 10-year payment plans. Biden’s announcement came after months of speculation and a pandemic pause on student loan payments that lasted more than two years.
Biden’s big new student loan forgiveness plan, explained (Vox)
According to the Wall Street Journal, President Biden’s student loan forgiveness plan could be the latest legal test of the administration’s emergency executive powers during the pandemic. If the White House plan is challenged in court, its lawfulness could hinge on the education secretary’s powers under a 2003 federal statute that gives the head of the Education Department the capability to waive or modify federal student-loan provisions during war or a national emergency.
Biden’s Student Loan Forgiveness Could Test Legal Powers (Wall Street Journal)
Regardless of its legal authority, the implementation of President Biden's widespread, income-targeted student loan forgiveness is shaping up to be a bureaucratic challenge for the Department of Education, writes Axios.
Student loan forgiveness in hands of "understaffed and overcommitted" agency (Axios)
According to the Hill, recent polling suggests the majority of American voters may be in favor of the Biden administration’s decision to forgive billions of dollars of student loan debt for low- to middle-income borrowers.
Most Americans support student loan forgiveness, poll finds (Hill)
Meanwhile, the White House is not taking criticism of the decision to forgive student debt lying down. After some Republican lawmakers tweeted or went on broadcasts to condemn the decision, the White House Twitter page responded by quote tweeting their comments – and sharing just how much each of them benefited from having their Paycheck Protection Program loans forgiven.
White House calls out Republicans who criticized student loan cancellation but had thousands in PPP loans forgiven (CBS News)
The Brookings Institution conducted an in-depth study of the issue in January 2020 since it was a big issue in the 2020 presidential campaign. According to Brookings, there’s a lot of student debt —about $1.5 trillion, up from $250 billion in 2004. Students loans are now the second largest slice of household debt after mortgages, bigger than credit card debt. About 42 million Americans (about one in every eight) have student loans, so this is a potent issue among voters, particularly younger ones.
Who owes all that student debt? And who’d benefit if it were forgiven? (Brookings Institution)
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