What’s Stopping Student Loan Forgiveness From Proper Implementation?
No one, in particular, is responsible for stopping the full-fledged implementation of Student Loan Forgiveness. The terms of such programs are always subject to change with the political party in power.
Let’s take an example of Trump’s & Biden’s administrations.
When Trump’s administration was in play, the then-Secretary of Education - Betsy DeVos tried to stop the student loan forgiveness program. She attempted that by delaying all the claim processes, increasing the burden on borrowers for proof, denying claims, offering only partial waive-off, using complex calculations that left applicants with $0.
However, after Biden’s administration came into power, in March 2021, the DoE announced it will revoke the complex calculation formula for partial waive-off of student loans. Instead of that, it will forgive student loans completely in borrower defense applications.
Can We Expect Student Loan Forgiveness Under Biden’s Reign?
On April 28, President Biden addressed Congress for the first time. During this address, he put forward a proposal of an additional $1.8 trillion budget in federal spending. This includes investment in education, however, he didn’t mention anything about student loan forgiveness.
Additionally, on the first day as President, he offered suspensions of interests and principal payments of all federal student loans till 1st October. This was extended for the purpose of temporary relief of student loan repayments during the COVID-19 pandemic. Also, in March, he waived off a $1 billion loan amount for students who were defrauded by for-profit institutions.
Even though Biden has not made anything clear about his stand on student loan forgiveness, according to the above information, we can at least expect something positive. But again, these promises have been made before, Biden currently has the power to approve such an action, but it hasn’t happened yet. Regardless if he does or doesn’t forgive student loans we have to remember that if he waives our student loans there will be tax implications, so start saving. Additionally, the amount to be waived has been decreasing with each passing month, the current forgiveness amount is $10,000, therefore if you have student loans that exceed that amount it’s better not to wait. Lastly, payments are set to resume on the last day of the month of January 2022, therefore you must begin planning and budgeting for that mandatory payment again.
Final thoughts, it’s impossible to know if student loans will be forgiven, but one thing you can control is forgiving those student loans yourself rather than waiting decades for someone to do it for you. Take control of your student debt, and pay it off 8x faster with the help of Qoins. We have tools like roundups and when I get paid to help you make monthly contributions, automatically, without ever thinking about it! Make 2022 the year your finances get on the fast track! And remember that refinancing your student loans could be a great way to lock in a lower interest rate and lower your monthly payment.