We all know student debt is one of the biggest issues for millennials and Gen Zers across the United States. The price of higher education rises every year, and with a degree serving as a major boost in landing jobs, it feels like a choice most students have little say in. One thing that’s helped some who are lucky enough to receive it is the Biden administration’s debt cancellations. Indeed, the Biden administration has previously stated they would work to cancel student debt. A few months ago, the Department of Education said they will work on the immediate cancellation of debt for roughly 40,000 borrowers who were part of a past mistake wrongfully denying them credit toward student loan forgiveness. In addition to this cancellation, the administration has expanded loan forgiveness to those who were defrauded by for-profit colleges and or permanently disabled.
This month, the administration extended their debt forgiveness even further: canceling the student debt of around 200,000 people who brought a class-action lawsuit against the government. All of these people claimed that they were stuck with federal debts from schools that were found to have misled them. Moreover, according to the terms of the Sweet v. Cardona settlement, the government has to approve the clearing of their debts. With so many people, the total sum comes around to around $6 billion in debt forgiveness. It seems that although debt is being cleared, it is only for those in specific situations.
What do you think about debt forgiveness and will it ever be extended to more people?
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.