(CTN News) – Biden’s Student Loan: President Biden announced Wednesday a long-awaited initiative that will reduce – and in many cases eliminate – student loan debt for more than 40 million Americans.
Biden’s Student Loan is a historical initiative but politically divisive in the run-up to midterm elections.
According to his campaign Biden’s Student Loan Biden is promises, to erasing $10,000 in federal student loan debt from households earning less than $250,000 a year. The president is canceling an additional $10,000 in Pell Grants for college students.
It’s seen as an unprecedented attempt to stem America’s rapidly rising student debt tide, but it doesn’t address the broader issue of college fees.
Conservatives denounced the plan as an insult to Americans who have repaid their debts and to those who did not attend college. There are likely to be legal challenges to Biden’s move, as critics across the political spectrum questioned his authority.
In addition, Biden extended a pause on federal Biden’s Student Loan payments for what he called the “final time.” The pause runs through the end of the year, and repayments will begin in January.
“Both of these targeted actions are for families who need them the most: working and middle class families affected by the pandemic,” Biden said at the White House.
Undergraduate and graduate student loans as well as Parent Plus loans are affected by the cancellation. If the loan was issued before July 1, current college students qualify. In order for dependent students to be eligible for financial aid, their parents’ household income must be below $250,000.
Most people will need to apply for relief in study. The Education Department has income data for a small share of borrowers, but the vast majority will need to submit an application to prove their income. Officials said applications will be available before the end of the year.
According to the Biden’s Student Loan, 43 million borrowers will be eligible for some debt forgiveness, with 20 million eligible for full forgiveness. Approximately 60% of borrowers receive federal Pell Grants. More than half of these scholarships are reserved for undergraduates with the greatest financial need.
Sabrina Cartan, 29, a media strategist in New York City, is expecting her federal debt to be eliminated entirely. The balance was $9,940 when she checked it on Wednesday.
Biden’s Student loan plan will allow Cartan to repay her parents’ additional thousands they borrowed for her education at Tufts University. Having been a first-generation college student, she called it a “leveling moment.”
Cartan, who has already repaid about $10,000 of her loans, said there are people who feel this isn’t enough. I can speak for myself and many others when I say “that is a lot of money.”
According to Braxton Simpson, Biden’s plan is a positive first step, but it’s not enough. There are more than $40,000 in student loans owed by the 23-year-old MBA student at North Carolina Central University. Her undergraduate debt was minimized by taking jobs, but at $10,000 a semester, the costs mounted.
She felt that higher education was essential to obtaining a more stable financial future as a Black woman. She said she would do this even if it meant taking on large amounts of debt.
To get out of many of the situations that have been systemically a part of our lives, we have to go back to school, Simpson said. As a result, we become indebted.”
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