I was excited with the news that President Biden has announced Student Loan Relief for borrowers who need It Most
Since 1980, the total cost of both four-year public and private college has nearly tripled, even after accounting for inflation. Federal support has not kept up: Pell Grants once covered nearly 80 percent of the cost of a four-year public college degree for students from working families, but now only cover a third. That has left many students from low- and middle-income families with no choice but to borrow if they want to get a degree.
For the most vulnerable borrowers, the effects of debt are even more crushing. Nearly one-third of borrowers have debt but no degree.
Black college graduates owe an average of $25,000 more in student loan debt than White college graduates.
Four years after graduation, 48% of Black students owe an average of 12.5% more than they borrowed.
Black student borrowers are the most likely to struggle financially due to student loan debt, with 29% making monthly payments of $350 or more.
The relief will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000. Nearly every Pell Grant recipient came from a family that made less than $60,000 a year
No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action.
To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022. Borrowers should expect to resume payment in January 2023.
The GOP is complaining against debt relief on moral grounds. the House Judiciary G.O.P. tweeted: “If you take out a loan, you pay it back. Period.” tweeted
Come on. America has had regularized bankruptcy procedures, which take debt off the books, since the 19th century; the idea has been to give individuals and businesses with crippling debts a second chance.
And many people have taken advantage of those procedures. For example, businesses owned by a real estate mogul named Donald Trump filed for bankruptcy on six occasions. During the pandemic, many business owners received government loans that were subsequently forgiven.
So, celebrate some good news for Black families disproportionately impacted by student debt and many other prejudices.
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