The COVID-pandemic has in no way offered students studying abroad with an easy life. “College degree: A ticket to middle-class life”, as stated by Biden, comes at expenses and burdens unanswered. Currently 1 in 6 US adults are seen having Federal Student Loans.
A lifelong burden, these student Federal Loans have now tripled as compared to what was in the 1980s. With an ever rising cost of attendance at top-tier US schools and universities, there has been no significant change with the Federal Support.
The student loan forgiveness news becomes prevalent, due to the financial harms caused by COVID-19. Also keeping in mind the crushing effects of this everlasting debt, Student Loan Debt Forgiveness has been recently launched by President Joe Biden. Under this scheme for US student loans, Biden has stated to write off up to USD 20,000 of debts.
What the Numbers Indicate
- 43,000,000 US students have a Federal Student Loan, 56% of whom owe less than 20,000 USD; and 51% debt holders are below the age of 35.
- The median student loan debt can be approximated to 17,000 USD.
- Pell Grants that used to cover more than 80% of educational expenses, now cover merely one-third of the student education costs.
- One-third of the borrowers do not even graduate with a degree.
- Almost all Pell Grant recipients come from families with incomes below or equal to 60,000 USD.
If the borrowers are claimed, what they are entitled to, this scheme for student loan Joe Biden will:
- Cancel student loans entirely for 20 million borrowers.
- Provide relief to borrowers of all ages- According to the US Department of Education, 1% of borrowers are 25 years and under, 44% are ages 26-39. More than a third are borrowers aged 40 and over, including 5% of borrowers who are even senior citizens.
- Ensure racial equity- The debt relief student loans are more likely to pave the way for the black community, thereby narrowing the racial wealth gap.
Who Can Apply for Student Loan Debt Forgiveness?
For debt relief, student loans have been exempted for individuals earning less than 125,000 USD and households having an annual income of less than 250,000 USD. According to the scheme pertaining to forgiveness of student loan, Biden has also stated that 20,000 USD will be written off for individuals awarded the Pell Grant.
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How to Apply for Debt Forgiveness?
Students can fill in their information through a form, which will merely take 5 minutes to complete. The form requires details such as– Name of the Borrower, DOB, Social Security Number, among others. Applications will be taken only till the end of 2023.
43 million Americans are estimated to apply for the Biden Student Loan Forgiveness scheme.
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Biden on student loan has also announced a three-part targeted debt relief plan to make the student loan system more manageable. With the help of the US Education Department, the cumulative Biden student loan forgiveness plan is set to provide relief to current university students in the form of cutting monthly undergraduate payments in half. Also, the President is all set to forgive loan balances after 10 years, and cover unpaid monthly interests.
While students definitely experienced an alarming financial crisis due to the pandemic, Biden’s current loan reforms are set to simplify loan repayment by strengthening accountability, and keeping US college costs under control.