Sarah Tew / Crumpe
Student loan debt in the United States is $ 1.71 trillion, making it the second largest consumer debt after mortgages. Lawmakers have called for some, if not all, of the debt to be canceled, but that has yet to happen.
President Joe Biden has run on forgiving $ 10,000 in student loan debt, but some members of Congress want him to forgive $ 50,000 per student. So far, Biden has not written off any debt across the board, although $ 1 billion in student loans defrauded by for-profit colleges has been canceled. There appears to be some movement over Biden’s campaign promise.
Here’s what you need to know about student loan forgiveness.
What is Biden doing so far for student loans?
During his presidential campaign, Biden called for remission of $ 10,000 of federal debt on a student loan per person. He also introduced additional plans for students in the Biden plan for education beyond high school, such as free tuition and more money for federal grants.
In addition, we should forgive a minimum of $ 10,000 / person in federal student loans, as proposed by Senator Warren and his colleagues. Young people and other holders of student debt have been the hardest hit by the latest crisis. This should not happen again.
– Joe Biden (@JoeBiden) 22 mars 2020
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Shortly after taking office, Biden signed an executive order extending the hiatus on student loan payments and interest until the end of September. Former President Donald Trump initially suspended payments at the start of the Coronavirus pandemic, and the suspension of the loan was extended two more times.
In Biden’s American rescue plan, there was a provision removing any tax penalty for canceling student loans. The IRS treats paid-up debt for less than what is owed as taxable income. This would apply to both public and private loans. The forgiveness provision lasts until December 25, 2025. However, as president, Biden has yet to officially write off any student loan debt.
It is important to keep in mind that there has not been any movement when it comes to loan debt cancellation as a growing number of scammers claim they can help you get canceled of your loans.
Can Biden Forgive $ 50,000 in Student Loan Debt?
At a CNN town hall in February, a member of the public asked if Biden would write off $ 50,000 in student loan debt.
“I am prepared to write off a debt of $ 10,000, but not 50” thousand, Biden said. “Because I don’t think I have the power to do it by signing the pen.”
It looks like Biden has changed his feeling. On April 1, he asked Education Secretary Miguel Cardona if he was within the president’s powers to cancel $ 50,000 in student loans. The ministry has yet to announce its findings.
