The Biden-Harris administration is expected to announce its decision on what will happen with the nation’s $1.3 trillion student loan debt today in Pennsylvania as part of an upcoming speech on the middle class at Duquesne University. The Biden-Harris administration has repeatedly stated that student loan debt relief will be one of their top legislative priorities and most recently confirmed that they would have a decision by summer 2019, likely as part of their 2020 budget proposal. While we don’t know exactly how the Biden-Harris administration will handle this issue, here are three potential impacts of their impending decision
Why Is This So Important?
Many students who graduated in the past ten years are now saddled with immense debt, unable to get out of their loans for a multitude of reasons. This often means that these students have to work long hours at jobs they find dissatisfying or unsatisfying, just to pay off their loans. With so much focus on increasing free higher education and making college more accessible, many people are wondering what President Harris will decide when it comes time to make a decision about student loan debt forgiveness.
Will she choose to forgive all student loans? Will she only forgive some? What impact will her choice have on society and our future generations? This past year, Harris made a bold move when she promised in her campaign that she would forgive all student loans if elected. It was a huge risk for her politically, as there are few people who don’t know someone who has struggled with paying off their student loan debt.
Many students worry about having to spend decades paying off these loans and resent being told that they need to work harder to have a better future when it’s clear to them that debt is stopping them from reaching their potential now. If Harris chooses to take away student loan debt completely as part of her administration, it will send shockwaves through Wall Street and banking industries alike because billions of dollars worth of student loan debt will disappear overnight.
Background Information
Former Vice President Joe Biden and Senator Kamala Harris have been in office since January 20, 2019. They have already made a decision on their first major campaign promise: student loan debt. On October 24, they announced that they are going to eliminate the loans for all students with a household income below $100,000 by making it free.
The plan is to work this out with Congress in order to make this happen as soon as possible. This is one of many promises that the new administration made and will be working on fulfilling during their term.
How Do They Stack Up Against Other Presidential Candidates?
Biden and Harris have been vocal about their support for reducing student loans and increasing access to student loan forgiveness programs. They have both proposed plans that would forgive up to $50,000 in student debt for everyone who graduated college with a degree in the past 10 years. Their proposals also include a plan to make public universities tuition-free, which would be funded by a new tax on Wall Street transactions.
Biden and Harris are both running campaigns based on being champions for the middle class, which is an area that has historically been neglected by many presidential candidates. The plan to make public universities tuition-free is reflective of this goal.
The Bottom Line
A decision has been made on student loan forgiveness, and while it is not as good as some were hoping, it is still an important step. What this means for you is that you will be able to file for a form of student loan forgiveness. This process will require you to fill out a claim form and provide evidence that your debt is eligible for relief. If approved, your remaining student loans will be forgiven after a ten-year period.
However, if denied, you can reapply every two years until approved. It is important to note that while you will be able to apply, many with private loans will not benefit from these plans. It should also be noted that only certain types of student loan debt are eligible for forgiveness. If you have more than one type of student loan, it is important to check if you are eligible for any other programs.
Finally, before deciding whether or not to fill out a claim form and possibly have your student loans forgiven it is recommended that you consult with a tax expert about how your taxes may be affected by what decision you make moving forward.