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The Latest Plan to Cancel Student Loan Debt



Image by Cari Dobbins from Pixabay
By a 2-1 margin, voters support forgiving at least some student loan debt. Less than a third oppose the policy.

Since the resumption of federal student loan payments in October 2023, the majority of borrowers have missed some or all monthly payments, according to a new survey of borrowers by Intelligent.com.


Based on the survey of 1,000 student loan borrowers, 40 percent have made all their student loan payments since the payment pause ended in October; 35 percent have made some payments, but 25 percent have made no payments at all. Of that group, 9 percent say they are part of a student loan repayment boycott to pressure the government into student loan cancellation.


Among respondents who have made zero payments, 69 percent say they cannot afford them. Of this group of borrowers, 63 percent earn less than $45,000 each year. Other reasons why borrowers have not made any payments are because there are ‘no penalties for missing loan payments until September 2024,’ they are ‘boycotting payments,’ they are ‘unsure how to make payments,’ and they were ‘unaware pause on federal student loan payments ended.’

 

Among borrowers who have yet to make any payments, 36 percent plan to resume payments as soon as possible, 36 percent are unsure when they will start repayment, and 18 percent plan to wait until September 2024. Conversely, 11 percent admit they have no plans to pay back their student loans.


“Borrowers grappling with student loan repayments should explore income-driven plans, loan forgiveness programs, and loan consolidation as possible strategies for managing their debts,” says Eric Eng, founder and CEO of AdmissionsSight. “Income-driven repayment plans, which align monthly payments with income level, might provide a more feasible payment amount.”


The survey was commissioned by Intelligent.com and conducted online by the survey platform Pollfish on Jan. 5, 2024. In total, 1,000 respondents completed the full survey. To qualify, all participants had to have a high school education or higher, and were screened to ensure they currently have federal student loans. The age of respondents was balanced to reflect the demographics of student loan borrowers.


View the complete report here:


President Biden's Efforts to Cancel Student Loan Debt

One of President Biden's key campaign promises ahead of the 2020 election was that he would cancel student loan debt. However, the U.S. Supreme Court struck down his forgiveness plan last year that would have helped 40 million people, and he has been seeking ways to provide relief to student loan borrowers ever since.


His most recent effort came Jan. 19 when he announced $5 billion in student loan forgiveness for 74,000 borrowers, including nurses, teachers and other public service employees who have been working for at least 10 years. It also forgives loans for some borrowers who have been making loan repayments for 20 years, but did not get relief to which they were entitled under existing programs because the U.S. Education Department failed to track those payments.


The Biden administration, which also announced that it's moving the start date of a new student loan repayment program from July to February, says it's already erased more than $130 billion in loans for 3.7 million borrowers through other administrative actions.


According to Danielle Douglas-Gabriel, who covers higher education economics for The Washington Post, advancing the start date is a key component of the latest repayment plan, known as SAVE. Under that plan, those who borrowed less than $12,000 and made payments for 10 years would have their remaining balance forgiven.


On the PBS News Hour, she pointed out that there are many people who borrowed less than $10,000 but now owe far more than that because of interest that's accumulated. It is this group, she explained, that defaults the most, often because they didn't finish college and were unable to get jobs that pay enough to repay the debt.


Despite Biden's piecemeal efforts, necessitated by the Supreme Court decision overturning his original plan, many younger voters are unhappy and refuse to give him credit for trying to help.


GOP Opposition

However, these voters need to consider what would happen if Republicans were in control of the White House.


Former President Donald Trump, who has a long record of opposing student loan forgiveness, sided with the Supreme Court.


“Today, the Supreme Court also ruled that President Biden cannot wipe out hundreds of billions, perhaps trillions of dollars, in student loan debt, which would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence; very unfair,” Trump said.


Nikki Haley, former South Carolina governor and Trump's last GOP challenger remaining, tweeted that “a president cannot just wave his hand and eliminate loans for students he favors, while leaving out all those who worked hard to pay back their loans or made other career choices. The Supreme Court was right to throw out Joe Biden’s power grab.”


The nation’s student loan balance, which exceeds $1.7 trillion, is a bigger burden to Americans than credit card or auto debt. Voters support forgiving at least some student loan debt by a 2-to-1 margin, according to a Politico/Morning Consult poll. Less than a third oppose the policy.

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