Biden announced Wednesday that his administration will forgive $10,000 in federal student loan debt for those making less than $125,000, with an additional $10,000 in forgiveness for those who went to college on Pell Grants and extend the repayment pause through the end of the year.
Depending on the size and number of loans a person holds, interest can increase a borrower’s overall debt by hundreds or thousands of dollars. For example, the average public school student borrows $32,880 to pay for an undergraduate degree. Under the fixed rate of 4.99% for undergraduate loans disbursed after July 1, that would average out to nearly $9,000 in interest over 10 years. But that assumes borrowers aren’t deferring their loan, delinquent on payments or on income-driven repayment plans. In those scenarios, interest often continues to accrue faster than borrowers can pay it, pushing repayment further out.
But his is one of dozens of proposals that’s languished in Congress, where a Senate evenly split between Democrats and Republicans and an intense focus on debt cancellation have made it difficult for significant education reforms to pass, or even gain traction. Congress has not passed a comprehensive reauthorization of the Higher Education Act of 1965, the landmark law that covers education policy and financial aid policies, since 2008.
The exact number of Latinos that will be affected is not known, but this measure is expected to impact millions. Under the plan, 43 million borrowers will be eligible for some debt forgiveness and up to 20 million could have their debt erased entirely, according to the administration. Some 60% of borrowers are recipients of Pell Grants, which are reserved for college students with the most significant financial need, meaning more than half can get $20,000 in aid.
Write a Reply or Comment
You should Sign In or Sign Up account to post comment.