President Biden has been under unrelenting pressure to forgive student loan debt….
It would seem that he really does NOT want to do so…
Promises made earlier have not materialised…
This new move is designed to deal with the pressure on him and maybe free up some votes along with maybe dumping some of the loan payment money back into the economy…
This is NOT across the board loan forgiveness…
This IS income based…..
The Biden administration said it plans to make it easier for lower-income student-loan borrowers to get debt forgiveness through an existing program that has enrolled millions of people, but provided few with relief.
The move, announced by the Education Department on Tuesday, is part of a politically sensitive debate on the forgiveness of student-loan debt and attempts to more broadly overhaul how the student-loan repayment system works. President Biden earlier this month extended to Aug. 31 a pandemic-related pause on payments of federal student loans and faces pressure from progressive members of his own party to forgive debt on a larger scale.
The changes would apply to an income-based program for repaying student loans, allowing around 3.6 million people—nearly 10% of all student-loan borrowers—to receive at least three years of credit toward eventual debt forgiveness.
The income-driven repayment program permits borrowers to pay a certain percentage of their income on loans for 20 to 25 years and have the rest of their balances forgiven. Loan servicers play a key role in how borrowers navigate their repayment options.
Borrowers and members of both parties in Congress have criticized the program as broken. A 2021 study of government data found that just 32 borrowers out of eight million enrolledin the program successfully had their debt forgiven after decades of payments. The program has existed since 1992.
“Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers,” Education Secretary Miguel Cardona said in a statement.
More than 40 million people owe around $1.6 trillion in federal student debt, a sum bigger than national totals for credit-card or auto-loan debt. Federal loans make up more than 90% of outstanding student debt.
Senate Democrats—including Banking Committee Chairman Sherrod Brown of Ohio and Judiciary Committee Chairman Dick Durbin of Illinois—recently wrote to the Education Department to complain that the income-based programs “as they currently stand, are not fulfilling their original promise.”
Republicans have also pressed the administration to improve income-based forgiveness. They see it as a preferred alternative to broad debt forgiveness or the pandemic-related pause on loan repayments…