You’ve paid off student loans, but you haven’t gotten any forgiveness on your student loan.
Here’s what you need to know.
Despite all the emphasis on canceling student loans, a large group of student loan borrowers were clearly excluded. There is the student loan exemption for public servants. There is the student loan forgiveness with total and permanent disability. There is a student loan discount for borrowers misled by their college or university. There is a student loan discount for borrowers enrolled in an income-based repayment plan. (Here’s who qualifies for the student loan waiver right now). President Joe Biden has canceled $ 11.5 billion in student loans, which is the most of any president. Some say this student loan forgiveness is life changing and are happy with the pace of student loan relief. Others say this student loan forgiveness is disappointing, with less than 1% of the $ 1.7 trillion in student loan debt canceled. It was just as the US Department of Education announced it would cancel $ 2 billion in student loans in a matter of weeks. However, a group of student loan borrowers that few mention as potential candidates for student loan waivers are borrowers who have paid off their student loans. When is their day in the spotlight? Let’s explore.
Student loan cancellation: main advantages
Advocates of massive student loan cancellation, such as Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) have championed the benefits of large-scale loan cancellation. student loans:
- provide economic stimulation;
- address disparities;
- freeing a generation from substantial consumer debt;
- help borrowers get married and start families sooner; and
- encourage borrowers to save for retirement and start a business.
“Does President Biden owe you a forgiveness of your student loan?” May be a question some student loan borrowers have. These borrowers, along with progressive members of Congress, believe that Biden, as president, has the existing legal authority to cancel student loans for all student loan borrowers by simply signing an executive order. (Here’s how to request a student loan forgiveness during the Biden administration). Rather than implementing large-scale student loan forgiveness, Biden focused on targeted student loan forgiveness for specific groups of borrowers. Biden wants to expand student loan cancellations, but he chose to lead a measured campaign to help borrowers who should get student loan cancellations under current law. (Here’s how to apply for a limited student loan forgiveness).
Student loan cancellation is not so universally popular
Not everyone supports student loan cancellation. (These borrowers are not eligible for waiver of their student loan). Republicans and many Democrats in Congress do not support massive student loan cancellation for all or most student loan borrowers. This includes forgiveness of student loans up to $ 10,000, $ 50,000 or any other amount. Opponents of the forgiveness of student loans cite several objections:
- Student loan cancellation could cost $ 1,000 billion;
- Cancellation of student loans is poorly targeted and could disproportionately benefit high net worth borrowers;
- Cancellation of student loans is narrowly suited to less than 20% of the population, but ignores the 80% of the population who have paid off student loans or who never went to college;
- The money from the student loan forgiveness could be used to provide other economic relief such as stimulus checks that could benefit more people; and
- Cancellation of student loans can be controversial in an election year when Democrats hold a slight majority in Congress.
Borrowers who have already paid off student loans have been excluded from student loan forgiveness
Borrowers who have paid off their student loans have been excluded from the prospect of a forgiveness of their student loan. (How to get a student loan discount). The immediate objection is that these borrowers have already paid off their student loans and are therefore no longer eligible or no longer in need of financial assistance. Some say that any student loan relief should be focused on current student loan borrowers who are in financial difficulty. However, these student loan borrowers should not be so easily turned down. Many student loan borrowers who have borrowed money for college or college would tell you that they were able to repay their student loans through multiple sacrifices. Like their modern counterparts, they too have been slow to get married, start a family, start a business, or save for retirement. In some cases, they’ve paid off student loans while working two or three jobs, delayed buying a home, or even taken out an extra mortgage to get rid of their student debt. They repaid their student loans to honor their financial agreement, even if it involved personal sacrifice. These borrowers are not necessarily the wealthiest or the most socially advantaged because they could “afford” student loans. (How to get student loan forgiveness even if you don’t work in the public service). No borrower is better than another, but will these student loan borrowers also get financial relief? Student loan cancellation, like most laws, is not retroactive. A student borrower who repaid their student loans in 1988 may not be compensated even if they repaid their student loans responsibly. However, perhaps a student loan borrower who has paid off their student loans more recently should be considered for “student loan cancellation”. A student loan forgiveness of up to $ 50,000 for borrowers could cost $ 1,000 billion. If borrowers who have already paid off their student loans are included, the amount can be significantly higher. Lawmakers considering massive student loan forgiveness should consider their constituents who have also struggled to live up to the American Dream and have paid off their student loans as well.
It’s an uphill battle for Congress to pass student loan cancellation. It is also difficult to compensate former student loan borrowers who have already paid off student loans. If you have student loans and are hoping for a student loan forgiveness, turn your attention to the end of student loan relief on January 31, 2022. Now is the time to plan your next chapter in student loan forgiveness. Know all your options. Here are some popular options for paying off student loans faster: