The U. The agency first forgave $1 billion in March for 72,000 borrowers with approved fraud claims against colleges, universities and career schools. Another $500 million was forgiven in e borrower defense rule. And $1.3 billion was also canceled in March for 41,000 borrowers with total and permanent disabilities. Now, as IA online installment loans almost one in eight Americans owe a record high of $1.73 trillion in college loans, many are hoping to get broader loan forgiveness to help manage or eliminate debt. Let’s break down what a Biden loan forgiveness plan could look like, and how it could benefit you. (Note: This is a developing story, and we will continue to update the article as more information becomes available.)
S. Households says that over four in 10 adults who went to college took on some debt to pay for their education, and those who were under 30 were more likely to take out college loans than older adults
Consider working with a financial advisor to ensure that financing college or paying off college debt is handled in the best possible way.
For comparison, 86% of adults with outstanding education debt for children or grandchildren borrowed money through student loans, 14% owed money on credit cards, 9% were paying debt from home equity loans and another 9% financed their family’s education needs in other ways
The $1.73 trillion student loan debt held by roughly 43 million borrowers is now the second-largest debt category in the U.S. after mortgage debt (worth $ trillion in ). And the average student loan debt is over $39,300 for each borrower in 2021.
If you break down student loan debt by age group, however, borrowers between 35- and 49-years-old hold the largest federal student loan debt in the second quarter of 2021, with $613 billion. Those aged between 25- and 34-years-old owe $500.6 billion, and those between 50- and 61-years-old have $273.7 billion outstanding.
Federal data from 2020 also shows that not all education debt comes from student loans. The Federal Reserve says that while 95% of those with outstanding debt hold loans, 21% borrowed with credit cards, 4% owed money on a home equity line of credit and 12% borrowed through other methods.
Collectively, the Federal Reserve’s report shows that 26% of “borrowers had at least one form of education debt besides student loans.” And the median amount of education debt (including other methods outside of student loans) was between $20,000 and $24,999 in 2020, with 20% of adults behind on their payments.
During his presidential campaign in 2020, Biden targeted his agenda for students as a “reliable pathway to the middle class.” The soon-to-be-elected president then described an education crisis where earning a degree and other credentials beyond high school has become unaffordable for many Americans.
For others, Biden said during his campaign, a college degree has also saddled young adults with so much debt that it prevents them from reaching important financial milestones like buying a home or saving for retirement. And in other cases, student loan debt could even burden multiple generations in a family, with parents and grandparents having to step up and shoulder a significant part of the education costs for their children and grandchildren.
On paign speech to cancel $10,000 in student loan debt for each borrower. For reference, federal data from the Department of Education shows that if Congress approves this relief initiative, it would completely eliminate student loan debt for 14.8 million borrowers who in the second quarter of 2021 owe less than $10,000.