IIn the coming weeks, President Biden should set out the details of its Debt cancellation plan of $10,000 per student. It appears that the measures he is taking will benefit those whose annual income is less than $125,000.
Biden balked at canceling student debt through executive action. On the contrary, he urges Congress to pass legislation that will alleviate the situation. Some fear, however, that debt cancellation could exacerbate inflation.
$17 billion student loan debt has already been forgiven by the Biden administration. Around 750,000 borrowers have been affected.
The Department of Education also announced that borrowers who have been placed on forbearance will receive a one-time loan adjustment.
This should result in immediate debt cancellation for tens of thousands of borrowers. It will also bring millions closer to debt relief.
Student loan forgiveness might be unfair to some
According Zack Friedman, CEO, Mentor (mentormoney.com). Best-selling author of The Lemonade Life and contributor to Forbesthere will clearly be winners and losers when it comes to student loan forgiveness.
If President Joe Biden moves forward with large-scale student loan forgiveness, federal student loan borrowers will gain up to $150,000 per year may be the most likely beneficiaries.
According to the White House, the president has yet to make a final decision on whether or not to cancel student loans, so that framework could change.
However, if there is a student loan forgiveness, the following people may be excluded. Simply put, forgiving student loans will be completely unfair to these people:
- people who do not have a student loan
- People who have never been to college
- People who have repaid their student loans
- People who chose community college
- People with private student debt
- People with large student loan debt
- Future student borrowers
In education, public policy and politics, the term “injustice” is frequently used. Student loans, say their proponents, are unfair, trap young people, create inequality, limit financial freedom and are prohibitively expensive.
After years of inaction, supporters say a large-scale student loan forgiveness is the most important policy initiative Biden can implement at this point in history.