If you are looking to know the way forward for the 50k student Loan Forgiveness and what Biden says about it, then this article is for you. 50k student loan forgiveness as a student seems like a really good amount of money to solve some tuition fee challenges. See the full details!
Overview of 50k Student Loan Forgiveness
In the build-up to the US Presidential Elections, then Vice President Joe Biden released his higher education plan on a Tuesday, aimed at providing options to ease student loan debt and accessibility to a two or four-year institution with the goal of having more people enter the middle class.
Unlike his more progressive Democratic rivals Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., Biden will only make tuition debt-free for those who attend two years of community college or high-quality training programs.
The Biden campaign argues that two free years of community college would cut four-year education rates in half since students could transfer their credits to complete their college education.
What Has Biden Said About Student Loan Forgiveness?
As for Biden himself, he has mentioned forgiving $10,000 per borrower. He took that figure from a House bill passed earlier this year that was part of a $3.4 trillion coronavirus relief package. (The bill received no support in the Republican-controlled Senate).
Asked for his thoughts about student loan forgiveness at a press conference in November, Biden said, “It does figure in my plan.”
But he didn’t provide specifics about exactly how he would like to get the loan forgiveness done, whether by executive action or through an act of Congress. And in case you’ve forgotten, an act of Congress is sometimes slang for impossible.
We’ll say it again, ‘cause it can never be repeated too often: Don’t look to the government to solve your financial issues.
How Much Student Loan Forgiveness Being Proposed
Sure, Biden is saying 10 grand, but are there any bigger spenders in government hoping to “help” poor indebted citizens? You better believe it.
How does 50,000 smackeroos per borrower sound? If that much forgiveness happened, you might start hearing spontaneous debt-free screams all over America.
Before you shift those student loan payments to something else in your budget, let’s see what these eager lawmakers are actually planning.
The proposal getting the most attention on social media has been a Senate resolution sponsored by Sens. Warren and Charles Schumer (D-NY). Once again, it’s related to helping borrowers hurt by the coronavirus pandemic.
It calls on the president to use executive action to cancel up to $50,000 in federal student loan debt for borrowers. Nice gift if you can get it! No wonder so many people are tweeting #cancelstudentloans!
But what exactly does “resolution” mean in this context? Well, it has about the same power as a New Year’s resolution it’s a nice thought, but in itself it’s meaningless.
A Senate resolution simply says the person or people who wrote it think it should be a law, but it doesn’t have any binding power.
A resolution’s sponsors have to wrangle enough of their fellow senators to get it passed into law. And even if that happens, then someone usually the taxpayer has to pay for it all.
With or without passage, the resolution could influence the president to follow through with an executive order that cancels $50,000 of debt per borrower, or some smaller amount.
Or he could ignore it completely. But whatever Biden thinks of the resolution, the paper it’s printed on remains paper—and it doesn’t grant him any new ability to cancel student loan debt right now.
Senate Resolution on Student Loans
Here are a few other Resolution from the Senate to take note of:
- It calls on the president to continue the pause on federal student loan payments for the entire duration of the COVID-19 pandemic.
- It makes the claim that legal authority already exists for the secretary of education to cancel federal student loan debt. Based on that idea, the president could work with leaders in his own administration to stop collecting payments from federal borrowers. Other legal experts, though, have questioned the senators’ theory.
- Unlike some current forms of student loan forgiveness, the resolution proposes forgiving the loan amounts without charging any income tax.
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What Should You Do About Your Student Loans?
Wouldn’t it be nice if you could cancel all the bad things in your life? Sure! If we had a ban button available for all of life’s aches and pains, we’d be pressing it all day.
Here in reality though, there are no magic wands. And there are very few simple solutions that don’t cost someone money or effort—and often both! So, how realistic is it to hope for some relief through student loan forgiveness?
Well, it’s not entirely outside the realm of possibility. But it’s also pretty unlikely. A controversial move like canceling student loans takes a lot more to pull off than PR and trending tweets.
Baby Steps for Settling Your Student Loans
Instead of waiting on somebody in Washington, D.C. to pay your student loans off for you, remember the Baby Steps:
- Baby Step 1? As fast as you can, save up a $1,000 starter emergency fund.
- If your income is stable and you’ve got that thousand-dollar cushion, take Baby Step 2: continue to pay your student loans each month wherever they fit in the debt snowball method. That means listing your debts from smallest to largest and paying minimum payments on everything but the little one. This helps you speed up progress on your debt, knocking each debt out and rolling older payments into the next largest until you’re completely debt-free!
- The sooner you pay everything off, the sooner you can begin putting the same intensity into Baby Steps 3-6, which means saving more for emergencies and retirement, and eventually focusing on other long-term goals like saving for your kids’ college and paying off your house!
And if you want to really speed up your progress with those student loans, explore refinancing—if and only if it makes sense for you. You just might lock in a better fixed-interest rate and a shorter term to pay the loan off! The goal is always to leave debt behind forever.
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To Round Up
At this point, I believe you have gotten to know the verdict and the current update of the 50k student loan forgiveness. You might need to consider our tips on how to go about your student loan.
Endeavor to share this article with your friends who might as well need to know more about this and don’t forget to keep up with our website for more informative blog posts.