“We’ve been talking daily about this, and I can tell you the American people will hear within the next week or so from the President and the Department of Education on what we’re going to be doing around that.”
So said U.S. Education Secretary Miguel Cardona regarding President Biden’s potential decision to forgive student loan debts on NBC’s Meet the Press on Sunday.
Now the wait is finally coming to an end as White House officials have set an announcement for Wednesday, according to a tweet from CNN released today.
The current pause on federal student loan payments is set to expire on August 31. Borrowers are patiently waiting on the President’s decision to either extend the deadline or officially forgive up to $10,000 of student loan debts for those who make under $125,000. Last week, the Biden administration also announced relief for students defrauded by ITT Institute. $3.9 billion of student loans were dismissed for 208,000 borrowers who attended the university.
“The Biden-Harris Administration will continue to stand up for borrowers who’ve been cheated by their colleges,” said Cardona.
As the August 31 deadline approaches, some are questioning the practicality of forgiving student debt amidst troubling economic times.
According to a recent CNBC survey conducted by Momentive, an AI-powered solutions company, 59% of Americans say they’re concerned that loan forgiveness will worsen inflation. Among these findings, Republicans (81%) especially believe this to be true compared to Democrats (41%).
5,142 adults participated in the study. Here are the key findings:
Forgiveness may present other hurdles
- 39% anticipate having to pay taxes on the forgiveness balance
- 33% can’t decide if borrowers should have to pay taxes on the forgiven balance
- 25% say they don’t expect a tax on the balance
Americans can’t agree on the future of loans
- 30% expect loan payments to resume after the August 31 deadline
- 29% anticipate only “some” individuals’ loans to be forgiven
- 26% say the pause on student loans will be extended
- Only 11% say all student loans will be forgiven
- 34% agree to offer loan forgiveness to those in need
- 32% agree all loans should be forgiven
- 30% agree that no one should have their loans forgiven
During the two year pause…
- 61% of federal student loan borrowers haven’t continued to make payments
- 20% have continued their monthly payments
- 16% have made less frequent payments
How respondents say their financial priorities have shifted during this pause:
- 51% say they’ve use the money they’ve saved for everyday expenses
- 32% say they’re paying off debts
- Only 15% have used the money to make loan payments
- 11% have saved the money altogether