Student Loan Repayment: Not for Everyone
Posted 5:03 p.m. on Saturday, September 10, 2022
Late last month, President Joe Biden announced a student loan forgiveness plan that could ease the repayment burden for millions of Americans facing high college debt.
Since the start of the COVID-19 pandemic, the federal government has suspended student loan repayments, but these are scheduled to expire on December 31 and payments will resume in January.
Biden’s plan calls for thousands of dollars of debt to be wiped off borrowers.
Up to $20,000 for Pell Grant recipients and up to $10,000 for non-Pell Grant recipients will be forgiven under the plan.
Borrowers are eligible if their individual income is below $125,000 or $250,000 for households.
According to an analysis by the Department of Education, the typical undergraduate student with loans has now graduated with almost $25,000 in debt.
The inhabitants weigh
The idea of borrowers being forgiven of debt and possibly other taxpayers being faced with carrying the burden is not something a Victoria woman, who did not want her name mentioned, is fussed with. OK.
“Personally, I’ve never taken out a student loan and don’t believe I should have to pay one,” she said. “Not only is it unfair to those who have never taken out a student loan (either choosing not to go to school or choosing to pursue their careers).
For Charlotte County resident Monique Williams, this debate explains why financial planning and education are so vital and that saving and personal finance should be focused on the costs of post-secondary education and taken in the past year. from high school.
“I faithfully pay my student loans every month…just over $586,” Williams said. “And that’s on an income-driven plan. Before that…$1287. I remember how many times this stopped me from qualifying for a mortgage.
A look at the numbers
Since 1980, the total cost of public and private four-year colleges has nearly tripled, even after adjusting for inflation.
White House officials say Pell Grants once covered nearly 80% of the cost of a four-year public college degree for students from working families, but now only cover a third.
This leaves students from low- and middle-income families no choice but to borrow if they want to get a degree.
What is a Pell Grant?
Created by the Higher Education Act in 1965 to promote access to education, the Federal Pell Scholarships are scholarships reserved for undergraduate students and students with significant financial need.
According to the White House press release, nearly 8 million borrowers could be eligible to get their relief automatically because their relevant income data is available to the Department of Education.
However, in order to be sure that loans are on the list, from October those with student loan debt can start applying for forgiveness.
The app will be available before the end of the payment break at the end of December. To be notified when the application is open, you can sign up on the Department of Education’s subscription page at https://www.ed.gov/subscriptions.