Student loans are one of the biggest burdens for millions of millennials across the United States. Indeed, the average millennial carries about $28,317 in debt, not including mortgages, according to Experian’s 2021 State of Credit report. When including mortgages, millennials’ total debt averages $255,527 per person.
To help alleviate this issue, the Biden administration has worked on canceling debts, at least to some degree. A few months ago, the Department of Education said they will work on the immediate cancellation of debt for roughly 40,000 borrowers. In addition to this cancellation, the administration has expanded loan forgiveness to those who were defrauded by for profit colleges and or permanently disabled. More recently, the administration has committed to canceling even more debt. This time, around $5.8 billion in outstanding student loans were forgiven. This action relieved over 560,000 borrowers who attended schools operated by the now-defunct Corinthian Colleges, one of the largest for-profit education companies that filed for Chapter 11 bankruptcy in 2015. Interestingly enough, the college faced a lawsuit in 2013 from none other than Vice President Kamala Harris when she was attorney general of California. The lawsuit was filed on the grounds of “deceptive and false advertising and recruiting” among other allegations, according to the department.
What do you think about the move to help relieve student debt and could we see this cancellation of debt expanding to more people in the future?
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.