Forgiving Student Debt
President Biden’s plan to forgive student loans deepens, now revealing that up to eight million Americans could get automatic debt relief. The relief would be upwards of $20,000 for each student, with the condition that they make less than $125,000 or if the heads of households earn less than $250,000. This automatic loan cancellation would occur within six weeks for those who have their income data filed with the IRS.
However, this plan has not come without controversy, as a recent lawsuit is seeking to block Biden’s plan altogether. The Pacific Legal Foundation, the plaintiff, claims that the executive branch has no authority to create a new forgiveness policy, as this undermines the legislative power of Congress. They assert that the plan would also require several borrowers across the nation to pay new local tax bills. Nevertheless, the advocates for the debt-relief plan believe it can help millions of working-class families across the country, especially minority groups as they purportedly hold a disproportionate share of the national education debt. Regardless, the $400 billion dollar plan will be set to span over 30 years in helping to alleviate financial situations for millions of Americans, but the economic consequences of such a large package will be unknown until it comes into effect.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.