President Joe Biden and his administration propose to forgive federal student loans up to $50,000, photo courtesy of Picpedia.org.
Federal student loans up to $50,000 will be forgiven by the Biden Administration if the Democratic party plans follow through with the president’s proposal.
In his presidential campaign, President Joe Biden promised those eligible to receive $10,000 of student loan forgiveness. Democratic party leaders such as Sen. Elizabeth Warren, D-Mass., Senate Majority Leader Chuck Schumer, D-N.Y., and Rep. Ayanna Pressley, D-Mass. are advocating for more — up to $50,000 of federal student loan forgiveness for those who are eligible.
Biden agrees with this increase in student loan forgiveness but must sign an executive order or seek bipartisan support for it to pass in Congress. The Republican party generally does not support debt forgiveness.
“Canceling student loan debt is the single most effective executive action President Biden can take to lift the economic prospects of tens of millions of young Americans,” said Sen. Warren in a recent conference.
“Data shows that canceling the student loan debt would result in greater homeownership rates, more housing stability, improve credit scores, higher incomes, higher GDP, more small business formation and more jobs.”
Bipartisanship will be the only way this student loan debt can be forgiven unless the president takes executive action. It is unlikely that any student loan forgiveness will happen soon, especially with national resources being allocated for urgent needs like COVID-19 vaccination, schools reopening and unemployment assistance.
Currently, federal student loan interest and payment collection has been temporarily paused after Biden signed an executive order on his first day of presidency.
The $1.9 trillion dollar “American Rescue Plan” released by the Biden Administration Jan. 20 will be used to combat the national impact of the COVID-19 crisis.
While the plan mentions support for higher education through additional grants from the Higher Education Emergency Relief Fund, the plan does not mention federal student loan forgiveness.
Advocates are stating that this reduction in federal student loans can help reduce the racial wealth gap in America, as black college students and graduates have the highest rates of student loan default.