Joe Biden says it’s time to cancel $10,000 of student loan debt for every American.
Here’s what you need to know.
In the wake of the Coronavirus outbreak, the former vice president and 2020 presidential candidate wants to help Americans manage their money, especially their student loans. Biden tweeted Sunday, “Additionally, we should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator Warren and colleagues. Young people and other student debt holders bore the brunt of the last crisis. It shouldn’t happen again.” Biden is referring to an economic relief plan proposed by Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Sherrod Brown (D-OH) and Elizabeth Warren (D-MA) that would:
- forgive $10,000 of federal student loan debt for every borrower.
- suspend student loan payments during the ongoing coronavirus crisis; and
- Suspend garnishment of wages, tax refunds, and Social Security benefits to pay for student loans
- Suspend all interest capitalization on student loans
- Expand the president’s student loan interest waiver plan to FFEL Loans, which are not federal student loans issued by the federal government
The plan, which requires congressional approval, would authorize the U.S. Department of Education, which is led by Secretary Betsy DeVos, to make monthly student loan payments on behalf of borrowers and forgive a minimum of $10,000 of student loans for all borrowers. The plan comes against the backdrop of borrowers seeking how to pay off student loans faster and get answers to student loan questions on student loan repayment, student loan refinancing and forgiveness.
President Trump’s Plan For Your Student Loans
President Donald Trump has implemented several relief plans for your student loans in the wake of the Coronavirus outbreak. Trump announced that he iswaiving interest on federal student loans. He also announced that you have an option to stop paying your federal student loans for 60 days. You can obtain a federal student loan forbearance by contacting your student loan servicer. Or, you can continue to make federal student loan payments if you choose. Trump, however, does not support outright student loan forgiveness. Last month, Trump called for the end of the Public Service Loan Forgiveness program in his annual budget. This doesn’t mean Trump doesn’t support student loan forgiveness. Rather, Trump favors a simplified income-driven repayment plan that would offer student loan forgiveness to borrowers. DeVos has explained why she believes it’s a good idea to end public service student loan forgiveness.
Student Loan Forgiveness
Biden’s call for $10,000 of student loan forgiveness is different from Warren’s original student loan forgiveness plan, which would cancel student loan debt for more than 95% of borrowers, and would entirely cancel student loan debt for more than 75% of Americans with student loan debt. Sen. Bernie Sanders (I-VT) has proposed forgiving all $1.6 trillion of student loan debt, including both federal and private student loans. Biden has his own $750 billion student loan plan, which is centered on income-driven repayment. Biden, Sanders and Warren all support the Public Service Loan Forgiveness program.