Student debt is the second leading cause of indebtedness for U.S. families, only behind mortgages, and it is one of our society’s most pressing concerns. In today’s article, we tell you what the Biden administration plans to do to tackle the situation.
In one of his first actions as president, Joe Biden extended the freeze on student loan payments for eight months to avoid further pressures on borrowers during the pandemic.
The average student debt is $33,000, and Biden campaigned on the idea of taking $10,000 out of each borrower’s federal loan debt. So the sitting president is asking the Department of Education to extend a pause on federal student loan payments until at least Sept. 30, continuing a measure that began at the start of the COVID-19 pandemic.
Borrowers, who owe a collective $1.5 trillion, would not be required to make payments, their loans would not accrue any interest, and all student debt collection would stop until September.
Congress halted payments last March as part of a virus relief package, and the Trump administration extended it twice. Student debt not only affects individual finances but may also unbalance the national budget. That is why the actions of the government need careful planning.
Job prospects for private college graduates are not very promising, and this situation makes it difficult for them to earn the income needed to repay their loans. Some debts end up being so high that students have to drop out before completing their studies.
Student debt has been a central issue for past administrations, and it certainly is a concern for the current one. So considering the experience and cooperative spirit Joe Biden brings to the table, we expect to see some sustainable solutions to this problem.
All student debt in the US visualized: