How Will Your Student Loan Be Forgiven?
Now that President Joe Biden has announced the cancellation of up to $20,000 in student loans, what is the next step for the debt forgiveness?
Biden's plan will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients, for borrowers with an individual income of less than $125,000.
Over eight million eligible people with loans will receive forgiveness automatically, as the Department of Education already has income information. A website with an application will be launched in the next few weeks.
In remarks at the White House, Biden said he knows that not everyone will be happy with the plan.
"I believe my plan is responsible and fair. It focuses the benefit on middle class and working families. It helps both current and future borrowers. And it will fix a badly broken system,” Biden said.
The president had no response when asked if the plan is fair to those who struggled to pay their student loans.
The pause on federal student loan repayment will be extended one last time through December 31, 2022.
Thumbs Up From Democrats
Reaction to the loan forgiveness ran along party lines, with Democrats backing the president's plan and Republicans against it.
"Today's actions will provide temporary relief for student borrowers," Sen. Jeanne Shaheen said on her Twitter account. "But to truly stem this crisis, comprehensive, legislative action from Congress is needed. I'm committed to helping student borrowers & ensuring access to higher education is affordable for all students."
Sen. Maggie Hassan said she does not favor canceling all debt, but instead bringing down the cost of higher education.
"The administration's announcement is a balanced compromise approach that will help those who need it the most. I will continue to work to make higher education and job training programs more affordable and ensure that our young people and economy are not held back by student debt," Hassan said in a statement.
Gov. Chris Sununu said student debt was not canceled, but rather transferred.
"Let’s be clear: President Biden did not cancel student debt — he transferred it on to the backs of millions of hardworking Americans who chose not to go to college for expensive degrees," Sununu tweeted. "@POTUS is unilaterally transferring the debt of NYC PhD students to blue collar workers across the country, forcing them to pay for it."
The frontrunners in the First Congressional District Republican primary found common ground in opposing the plan.
“Joe Biden and Chris Pappas’ plan to raise taxes on everyday working-class families in New Hampshire to subsidize the student loans of Chris Pappas’ Harvard buddies is offensive. Instead of encouraging the bloated college education system to raise prices even higher, we must reform our higher education system and provide greater resources to technical degrees, not bailout the nation’s elite,” Matt Mowers said in a statement.
Karoline Leavitt had a similar message to Sununu's about where the debt will go.
"Let’s be honest — the debt will not be 'cancelled.' It’s going to be transferred to millions of hardworking people, many of whom made the judicious decision NOT to attend college," Leavitt said on her Twitter account. "This is horrific policy and sets a terrible example for young Americans."