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Tag: Student Debt

One overlooked part of the Biden student loan plan that could end “horror stories”
Business

One overlooked part of the Biden student loan plan that could end “horror stories”

Although the Biden administration's plan to forgive federal student loans has centered on the government erasing $20,000 in debt, other provisions could have an even bigger impact on students and college graduates.In perhaps the most significant change, the Department of Education is expected to propose a rule that would ensure borrowers make payments sufficient to cover the monthly interest on their student loans. That would address the problem of what is known in the trade as "negative amortization," in which a person's loan balance keeps growing despite their consistently making payments. Consumer advocates have long criticized so-called income-based repayment plans, which are supposed to help make student loans more manageable and which are employed by about one-third of all...
Forgiving $10,000 in student debt could cost the U.S. $300 billion
Business

Forgiving $10,000 in student debt could cost the U.S. $300 billion

The Biden administration on Wednesday announced a long-awaited plan to cancel up to $10,000 in federal student loan debt for millions of Americans and up to 20,000 for low-income borrowers.An analysis earlier this week put the total cost of forgiving that debt at almost $300 billion in the first year, according to the Penn Wharton Budget Model, a group of economists and data scientists at the University of Pennsylvania who analyze public policy to assess their economic and fiscal impact. However, economists at the Penn Wharton Budget Model are now updating their analysis, which was based on the assumption that up to $10,000 of forgiveness would be available to borrowers. But the White House added an unexpected twist by providing up to $20,000 of forgiveness for Pell Grant recipi...
Will President Biden extend the pause on student loan payments? Borrowers left wondering as deadline draws closer
Politics

Will President Biden extend the pause on student loan payments? Borrowers left wondering as deadline draws closer

The pause on federal student loan payments is set to expire at the end of this month, but despite the looming deadline, millions of Americans do not have guidance as to whether those payments will actually resume for the first time in more than two years. Federal student loan payments have been on hold for roughly 40 million Americans since the beginning of the coronavirus pandemic. Interest on those loans has also been set at zero percent for the duration of the pause. Most recently, the Biden administration in April extended the pause through August 31. At the time, the White House said the president would make a decision about canceling student loan debt before the pause expired or it would be extended. "It's an unforced error to be adding ...