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Will Biden cancel student loans? The White House denies a debt forgiveness report

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The White House reportedly plans to cancel $ 10,000 of student debt per borrower, fulfilling a promise made by President Joe Biden during the 2020 campaign.

Forgiveness of debt was a theme that recurred during the first year and a half of Biden’s presidency. Some Democrats and activists are calling for an even greater apology, while conservatives including Sen. Mitt Romney, Utah – reject the idea.

How soon will the White House make a decision? Biden had originally hoped to make an announcement this weekend, but it was postponed afterwards Shooting at Rob Elementary School in Uwalde, Texas, on Tuesday, according to The Washington Post.

  • The White House has denied the allegations, saying Reuters“No decisions have been made yet.”
  • “But let me remind you that since the president took office, no one has been obliged to pay a penny of student loans,” White House spokesman Vedant Patel said. The last pause on interest and student loan payments ends in late August.

Who will benefit? Recent plans do not provide for a full apology, but instead restrict the rights of Americans earning less than $ 150,000 a year or less than $ 300,000 for couples applying together. The Washington Post reports.

  • This will continue to benefit most borrowers, as it is estimated that 97% of all student debt falls on people who fall below these thresholds.
  • The Washington Post It is estimated that 53% of borrowers currently owe less than $ 20,000, but there are more than 3 million borrowers with a loan balance of more than $ 100,000. CNBC.
  • More than 40 million Americans are in debt on student loans with a total balance of $ 1.7 trillion. Eliminating student debt of $ 10,000 per borrower will cost $ 321 billion. New York Federal Reserve Systemand would fully forgive loans to about one-third of borrowers.

What to plan: Borrowers can hope for relief, but Biden’s latest plan could change significantly or be canceled altogether, so experts warn that borrowers should have a plan in case the loans return to maturity in late August.

  • Forbes recommends refinancing existing loans or signing up for income-based payment plans if you are having trouble making regular payments.
  • They also offer avoid paying off student loanswhich can lead to increased interest.

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