President Joe Biden just canceled $ 1 billion in student loans– and this is how America reacted.
Here’s what you need to know.
The student loan cancellation is here, and the U.S. Department of Education just canceled $ 1 billion student loans for 72,000 student loan borrowers. These student loan borrowers have previously had some student loans canceled, but now they receive a full student loan cancellation if they attended a school that engaged in fraudulent or illegal practices, or was suddenly closed.
What do people think of this important decision to cancel student loans? Here’s a non-exhaustive, high-level cross-section of some social media feedback:
1. Biden Cancels $ 1 Billion Student Loan – Let’s Celebrate
Many people on social media praised the decision to cancel $ 1 billion student loan and said it was an important step in addressing student loan cancellation. Student loan borrowers have been hoping for financial relief, and they say Biden kept his promise. Not only did Biden have the student loan canceled, but he did so for the first 100 days of his administration. What is important is that this student loan termination is tax free for the student loan borrowers. The new economic stimulus package makes the granting of student loans tax-free until December 31, 2025.
2. Termination of the student loan – this is just the beginning
Congress can cancel student loans more than once. While some borrowers cheered the student loan cancellation decision, others portrayed this student loan cancellation only as the first step in a larger student loan process. They view this announcement as a potential forerunner for Biden to have student loans through an executive order canceled or Congress canceled student loans by law. Regardless of whether the student loan waiver amount is $ 10,000, $ 50,000, or some other amount, this group views this student loan cancellation only as the beginning of a broader student loan recovery plan.
3. Cancellation of the student loan – this only helps some borrowers
Another group of people on social media criticized Biden’s termination of the student loan. Why? While acknowledging the magnitude of the $ 1 billion headline hit, they noted that the actual amount of student loan forgiveness pales in comparison to both the amount of student loan debt outstanding and the total number of student loan borrowers. For example, the latest student loan debt statistics show that 45 million borrowers together owe $ 1.7 trillion in student loan debt. On a percentage basis, the $ 1 billion student loan waiver is 0.06% of all outstanding student loans. Similarly, 72,000 student loan borrowers benefit from approximately 0.2% of all student loan borrowers. So this group of people are not particularly impressed with this latest move in student loan cancellation.
4. Will my student loans be canceled?
A fourth group of people asks: “Will my student loan be canceled?“Some of these student loan borrowers have been attending schools that have closed, while others say their college cheated on them. If your school misled you or engaged in illegal fraudulent practices, you may be able to cancel some or all of your federal student loan debt. You can apply for student loan termination under borrower protection to waive student loan repayment.
5. Biden will cut $ 1 billion student loans, but taxpayers will pay
One final group of people on social media says this student loan termination is an unfair asset transfer that is keeping taxpayers on the bill. They say that canceling student loans is not free; it is funded by taxpayers. Some social media users wonder why taxpayers need to bail out student loan borrowers who, for example, have made bad decisions to attend for-profit colleges. (A response from several social media users: Congress saved large corporations. Why not give student loans to individual borrowers in dire straits?). Others wonder why there should be widespread student loan waivers for some borrowers when millions of other borrowers have properly paid off their student loans by making financial sacrifices and, in some cases, holding multiple jobs. They say there are several reasons why student loans shouldn’t be canceled, and they don’t want taxpayers to pay for student loan forgiveness when the vast majority of Americans either don’t have student loans or haven’t attended college.
Biden Student Loan Granting: What’s Next?
This may not be the only student loan issuance that will occur during the Biden administration. Congress and the President are both considering widespread student loan waivers. Importantly, this $ 1 billion student loan cancellation is different from the large-scale student loan cancellation that could potentially affect millions of student loan borrowers. The borrowers affected by this important student loan announcement are a select group of people who have been granted partial student loan waivers, but Biden seeks to make these borrowers complete by defending borrowers to repay and terminate the remainder of their federal student loan . The debate on canceling student loans for more student loan borrowers will continue. So don’t expect large-scale student loan cancellation right now. However, don’t expect all 45 million borrowers to have their student loan waived or all of their student loans. It is more likely that Congress will limit who qualifies, how much student loans are made, and when the student loan could be canceled. If Congress, rather than the President, cancels student loans, the progressives in Congress will have to come up with a student loan bill that moderate Democrats can support. Make sure you create your own student loan plan as there is no guarantee that your student loan will be canceled. Here are a few possible options to consider: