- Aug 13, 2001
- Georgia, US
- Basic Beliefs
People who have been paying down their student loans for decades will get a better chance at debt cancellation, as the Biden administration temporarily relaxes the rules of certain repayment plans.
On Tuesday, the Education Department said it will grant federal student loan borrowers additional credit toward loan forgiveness under what is known as income-driven repayment plans. The move will bring more than 3.6 million people closer to debt cancellation, including 40,000 who will be immediately eligible, according to the department.
About half of the more than $1 trillion in outstanding student loans made directly by the federal government are being repaid through one of the four income-driven plans. The plans cap monthly payments at a given percentage of earnings, with the promise that the balance will be forgiven after 20 or 25 years of payments.
I've never supported blanket student loan forgiveness, but this seems like a reasonable plan. Some of the details are absent from this article, but it appears as if it will help those who have been paying on their loans for many years, especially those who barely make enough income to afford their monthly payments. The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.
The trouble is that decades of poor communication between the Education Department, its loan servicers and borrowers have made the program difficult to navigate. Now, Education Secretary Miguel Cardona says the agency will remedy years of administrative failures that effectively denied loan forgiveness to some borrowers enrolled in income-driven plans.
“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” Cardona said Tuesday.
Congress created the first income-driven plan in the 1990s, but few people took advantage until the Obama administration expanded eligibility, lowered monthly payments and shaved years off the path to forgiveness. The goal was to help more people manage their debt and avoid default.
Will this help or hurt the Democrats in November is anybody's guess. I would never vote for a Republican, regardless if I support all or most of the Democratic plans, and since I paid off my student loans decades ago, I have no iron in this pot.