“student Loans And Climate Change: Environmental Implications” – President-elect Biden has a clear plan for your student loans. As he articulated during his presidential campaign, Biden would make several changes to student loan repayment, student loan forgiveness, college costs, and even cancel student loan debt.
This is big. However, don’t expect to have all of your student loan debt cancelled. As a candidate, Biden proposed canceling up to $10,000 in student loan debt for each borrower. Importantly, this includes federal student loans, not private student loans.
“student Loans And Climate Change: Environmental Implications”
If you attend a two- or four-year public college or university and earn less than $125,000 a year, you may be eligible for student loan forgiveness. Importantly, this only applies to college student loans. So, if you have graduate school student loans, then you would not get student loan forgiveness under this plan.
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You may be able to borrow fewer student loans. Why? Biden campaigned on the “free college” plan that Sen. Bernie Sanders (I-VT) and Sen. Elizabeth Warren (D-MA) promoted as presidential candidates. Under the proposal, Biden could make two- and four-year public colleges free. So, if you qualify, the tuition portion of your college expenses may be covered by this proposal. This means you would likely borrow less in student loans to cover non-tuition costs, such as room and board.
Biden wants to restore income-based repayment plans. There are currently four income-based repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAIE), Revised Pay As You Earn (REPAIE), and Income-Contingent Repayment (ICR). These plans require 10-20% of your discretionary income. Biden would cap student loan repayments on federal student loans at no more than 5% of discretionary income. Furthermore, enrollment in income-based repayment plans would become automatic, whereas currently you have to enroll. Student loan forgiveness would also become automatic after 20 years, and you would owe no income tax on the forgiven amount.
Biden wants early public service loan forgiveness. Currently, it takes 120 monthly payments, or 10 years, to receive public service loan forgiveness. Biden would cut the time in half: five years to get $50,000 in student loan forgiveness, which is $10,000 a year. Although the timing would be sooner, it is unclear whether borrowers would be able to receive more than $50,000 in student loan forgiveness. For example, there is currently no limit on the amount of federal student loan forgiveness you can receive under the Public Service Loan Forgiveness Program.
In addition to these five changes, a sixth change is certain: Betsy DeVos will no longer be the US Secretary of Education. DeVos, who served in the post under President Donald Trump, will not be secretary of education starting Jan. 20, 2021, the day Biden is inaugurated. There are several potential replacements, including Warren, who has promoted issues such as student loan forgiveness, tuition-free college and a plan to cancel student loan debt.
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Want to pay off your student loans faster? Here are some good places to start, all of which are free: Can Joe Biden Find a Student Loan Forgiveness Plan That Makes Everyone Happy? Biden confidants are advising the president-elect to forgive student debt in some way. Is there one correct answer?
Students hold placards as they demonstrate at Hunter College, part of New York University, to protest higher student loan debt increases and rally for tuition-free public colleges in New York on November 13, 2015. (Jem Ozdel/Anadolu Agency/Getty) images)
When President-elect Joe Biden takes office on January 20, one of the first questions he will face is how to help the millions of Americans struggling to pay off student debt. His answer to that question could turn out to be one of the most poignant of his presidency, because there are Americans who are likely to be upset with him no matter what he does. And as Senate Minority Leader Chuck Schumer recently told reporter Anand Giridaradas, he hopes Biden will forgive the first $50,000 of student loan debt through an executive order, a measure far more ambitious than what Biden himself proposed during the 2020 campaign.
Although the U.S. Department of Education has granted student loan borrowers a temporary grace period, that period will end on Dec. 31 and there is no immediate plan to replace it, according to CNBC. During the 2020 presidential election, Biden promised to forgive the first $10,000 of student debt for all borrowers, as well as provide full forgiveness for individuals who earn less than $125,000 a year and attend a public or historically black university. Schumer, by contrast, is urging Biden to follow a path forged by Sen. Elizabeth Warren, D-Mass., namely “a proposal … to pay off the first $50,000 of the debt.” Schumer also claimed that “we believe Joe Biden can do it with a pencil as opposed to a law.” Even if Biden goes ahead with his original plan, it would still eliminate student debt for roughly 10 million borrowers and reduce America’s $1.7 trillion in outstanding student loan debt by roughly one-third.
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As Georgetown University law professor John Brooks said by email, there is no historical precedent for anything “of this magnitude” in the United States, though he added that “student debt forgiveness itself is very common.” He noted that student debt can be forgiven if the student’s school closes, if he becomes permanently disabled, “there was some misconduct by the school or the lender (a “borrower defense” or “false certification” discharge), ” the student works in public service and “paid for 10 years (yet still working out the kinks in this program)” or someone paying off their student loan debt due to bankruptcy.
“I have never seen any historical episode with debt forgiveness of this scale in the US,” Mati told za. “I’ve never heard of another country that would forgive student debt on this scale.” As for debt relief, there is a long history of debt jubilees.
A “debt jubilee” is when all debt is erased from public records across a sector or nation. Debt jubilees have a long history, stretching back from Babylonian King Hammurabi approximately 3,800 years ago to modern Germany, where in 1953 an international decision was made to write off much of the country’s foreign debt. Some scholars, such as anthropologist David Graeber, have advocated a “great reset” in which both international sovereign and consumer debt would be immediately and completely canceled.
Unless Democrats win the Georgia Senate runoff in January, Biden will have to try to implement his agenda with a Republican Senate that may be inclined to obstruct him. If that happens, he could resort to using executive orders to implement student debt forgiveness, a policy move that would almost certainly be challenged in court. At the same time, Senate Republicans may be inclined to work with Biden given that 22 million Americans currently benefit from student loan deferrals.
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“For millions of borrowers, the effects of the pandemic are still raging,” Seth Frotman, executive director of the Student Loan Protection Center, told The New York Times. “The thought of their student loan payments being turned on again and having money taken out of their account via automatic debit, or seeing their wages penalized again — the results will be cataclysmic for their finances.”
Politically, there is the threat of repossession from those who have already paid off their student loans and think it is unfair that others should not be forced to do so as well.
In a viral editorial last year, Philip Klein of the Washington Examiner argued that Warren’s plan to cancel up to $50,000 in debt for more than 42 million people, or about 95% of those with debt, would be “grossly unfair to those who have struggling to pay off their student loans.” He argued that politicians should feel sympathy for “those who may have taken better paying jobs that they didn’t necessarily want to pay off the loans for.” And there are those who cut their expenses to the bare bones in order to pay off their loans while watching their friends with a similar salary eat out and travel and deprioritize paying off their loans.”
He concluded: “Those who were more responsible will feel justifiably outraged at the idea that those who may have been more profligate will now be bailed out by the government.”
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Klein’s editorial received considerable backlash, with people on Twitter sarcastically commenting that his logic was akin to saying “Free pizza at the HuffPost DC office today. What a slap in the face to us who have already eaten” or “Child labor regulations and a slap in the face to the children who worked in the coal mines”. Kathi Valeii of The Independent denounced Klein’s argument as “self-centered, vilely spiritual by the bootstraps mentality.” Medium’s Jessica Young wrote “implementing a plan like Warren’s is no slap in the face. It’s a way to rehabilitate the economic costs of higher education for those who need it most, especially a generation heavily incentivized to go to college and take out risky student loans with the unfulfilled promise that it will all pay off in the long run.
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