Forgive $ 25,000 in student loans
A new bill in Congress would write off $ 25,000 in student loans.
Here’s what you need to know and what it means to you.
Representative Vincente Gonzalez (D-TX) proposed to write off student loan debt in new congressional legislation aptly called the Student Loan Relief Bill:
- $ 25,000 in student loan debt forgiveness
- only applies to federal student loans
- no private student loan debt forgiveness
- write off $ 775.5 billion in student loan debt
- could help over 40 million student loan borrowers
“At $ 25,000 or less, this gets 70% of the relief for US student loan borrowers,” Gonzalez said. The monitor. “If you have more than that in student loan debt, then you’re just discounting that $ 25,000 as part of my proposal. So it’s a little burden to carry as a country and we’re helping a group of people who are really young Americans who are trying to improve themselves and be better educated and better trained. Ultimately, with this education and training, they are also able to pay more tax revenue. So in a sense we are already going to get all these resources back through their education, but it also generates income that will be spent in the economy anyway. “
Gonzalez, who racked up nearly $ 100,000 in student loan debt as a law student, wants Education Secretary Betsy DeVos to write off student loan debt. The Texas congressman said that despite all the stimulus packages, students and young people have not received their fair share. The current state of the economy and the Covid-19 pandemic have not helped borrowers pay off student loans faster.
Cancel student loan debt: proposals
Gonzalez is not the only one in Washington proposing to cancel student loans. His bill, HR 8514, joins a litany of other student loan cancellation proposals, including:
- $ 1.6 trillion debt forgiveness: Senator Bernie Sanders (I-VT) proposed $ 1.6 trillion in student loan cancellation, including federal student loans and private student loans
- 95% of Americans: Senator Elizabeth Warren (D-MA) proposed to write off student loan debt for 95% of Americans
- Remission of debts of $ 10,000: Senate Democrats have proposed up to $ 10,000 for student loan debt forgiveness
- Remission of debt of $ 30,000: House Democrats have proposed up to $ 30,000 for student loan cancellation
- Remission of debt of $ 50,000: Warren and Senate Minority Leader Chuck Schumer (D-NY) have proposed giving President Donald Trump the power to write off up to $ 50,000 in student loan debt
- Remission of debts of $ 10,000: The Heroes Act proposed to cancel up to $ 10,000 in private student loans for borrowers in financial difficulty due to Covid-19
- Former Vice President Joe Biden and Senator Kamala Harris (D-CA) to write off up to $ 10,000 in student loan debt due to Covid-19
Will student loans be canceled?
This new student loan proposal will likely be not become law this year. Even if House Democrats pass this student loan relief, the Senate will not. It is unclear why this new student loan cancellation bill was proposed when there are other similar student loan bills pending in Congress. Like other proposals focused on the cancellation of federal student loans, this bill on student loans appears to differ only in the amount of the cancellation of student loans. Since the Heroes Act refers to a $ 10,000 student loan forgiveness and Biden supports the same level of forgiveness, it’s more likely that if there is a future student loan forgiveness, it would be $ 10,000. That said, to date, Congress has failed to get a student loan forgiveness and does not plan to pass student loan legislation for the remainder of that term in Congress. While that may change if Democrats win the Senate and the White House, don’t expect someone to write off short-term student loan debt.
How to repay student loans
Make sure you have a game plan for paying off student loans. If you don’t know how to pay off student loans, start with these four options, which come at no cost: