The student loan debt crisis in America is a problem that needs to be addressed. Higher education costs have soared over the years, while wages have remained stagnant for many Americans. As a result, the average graduate who borrowed money from the federal government leaves school with more than $37,000 in student loans. That’s why President Biden and lawmakers are discussing ways to fix this issue at their recent meeting on Tuesday.
What is happening with student loan borrowers in the U.S.?
The student loan debt crisis in the United States will only worsen. According to a recent Consumer Financial Protection Bureau report, more than 44 million borrowers collectively owe $ U.S. trillion in outstanding student loans. That’s more than twice as much as it was just a decade ago!
Student loan repayment had been on hold since March 2020, when COVID-19 sent the U.S. into an economic crisis. Interest is also set to kick back in when loans resume. But the group of 14 lawmakers wants the interest waived through the end of the coronavirus pandemic health emergency.
“Accumulating student loan interest can be a daunting challenge for borrowers with the lowest incomes or the heaviest student debt burdens,” the senators said in the letter Monday to Mr. Biden.
If we don’t extend the pause on payments, then that horrendous interest will pile up at a time when too many are still not financially prepared to shoulder a giant monthly bill. Moreover, with Omicron spreading, the uncertainty about what happens following demands at least one more extension of the student loan payment.
Last week, a broad coalition of primarily left-leaning organizations, consumer advocacy groups, and unions called on the Biden administration to extend the payment pause. The groups, led by the Student Borrower Protection Center, said in a letter to the White House that “a rush to resume student loan payments is a recipe for disaster and will result in widespread confusion and distress for student loan borrowers.”
What about the federal student loan payments?
Unfortunately, people cannot even pay off their student debt. According to the Student Loan Report, only 36% of borrowers today are paying back their loans on time; nearly 40% say they’ve made no progress in repaying what they owe because of how unaffordable it is!
The average borrower with outstanding federal student loan debt owes $US34,144.
Federal student loan borrowers in the Biden administration will have access to lower interest rates and income-driven repayment plans.
What President Biden and lawmakers can do to fix the student loan debt?
President Joe Biden thinks he has a solution for this crisis. President Biden wants community college to be free for everyone. We can do that right now with our money and get Republicans (to) stop fighting us. It will cost $US60 billion annually, but that’s less than one-tenth of what we spend on defense.
The president plans to work with the Department of Education and lawmakers to develop a plan to help borrowers refinance their student loans.
We can only hope that President Biden and lawmakers can fix this crisis for all student loan borrowers. Let your representatives know how important this issue is to you.
What can be done about this?
President Biden and Congress have taken steps to help ease the burden on borrowers. Biden signed a new bill that expands repayment options for federal student loans.
Student loan borrowers call for a halt on payments until the administration fulfills promises to fix the broken system and cancel the debt.
President Joe Biden has been silent about a plan to broadly cancel student debt since taking office, even though he campaigned to cancel up to $10,000 in student debt for all borrowers. However, his administration has absolved some student debt for specific groups like borrowers with disabilities and active duty service members.
Lawmakers and President Biden can do more to fix the student loan debt crisis. This includes expanding repayment options, canceling federal student debt, and pausing payments for all borrowers. It’s a great time to be in the market for student loans. There are options available that you might not have heard about before, like refinancing through EdFed.