A $50,000 student loan forgiveness would cancel student loans for 36 million people.
Here’s what you need to know — and what this means for your student loans.
If there is $50,000 in student loan forgiveness, 36 million people would have no federal student loan debt. That’s the message Sen. Elizabeth Warren (D-MA) wants you to know. In a town hall meeting on Thursday, Warren said Biden must cancel student loans “immediately” and provide permanent full relief.
“Cancelling $50,000 in student loan debt would give 36 million Americans permanent total relief,” Warren said. noted during the town hall, which Senate Majority Leader Chuck Schumer (D-NY) and Rep. Ayanna Pressley (D-MA) also attended. “It would be the end of their debt burden. And it would help millions more by dramatically reducing the principal of their debt.
How many student borrowers would get their student loan forgiven completely?
Congressional progressives and President Joe Biden are considering student loan forgiveness. (Where Biden stands on student loan cancellation). The good news for student borrowers is that both Biden and congressional progressives support large-scale student loan forgiveness. However, they differ on the amount. (The student loan forgiveness could be the reason the Democrats lose the midterm elections). Some members of Congress want $50,000 in student loan forgiveness, while Biden backs $10,000. (Are you eligible for $5 billion in student loan forgiveness?) Here’s how many student borrowers would get full student loan forgiveness for their federal student loans based on the amount of student loan forgiveness:
- $10,000 student loan forgiveness: 15.0 million borrowers
- $20,000 student loan forgiveness: 24.1 million borrowers
- $30,000 student loan forgiveness: 30.0 million borrowers
- $40,000 student loan forgiveness: 33.7 million borrowers
- $50,000 student loan forgiveness: 36.1 million borrowers
How many defaulting student borrowers would get their student loan forgiven completely?
According to the latest student loan debt statistics, approximately 11 million student borrowers are in default, default or forbearance on student loans. Based on the total amount of federal student loan forgiveness, this number of student borrowers would get full forgiveness of their student loan:
- $10,000 student loan forgiveness: 4.7 million borrowers
- $20,000 student loan forgiveness: 7.2 million borrowers
- $30,000 student loan forgiveness: 8.5 million borrowers
- $40,000 student loan forgiveness: 9.3 million borrowers
- $50,000 student loan forgiveness: 9.8 million borrowers
What this means for your student loans
What does this mean for your student loans? Although there is a major proposal to cancel $50,000 in student loans, Congress has not passed any legislation. (How Federal Student Loans Will Change This Year). At the same time, Biden called on Congress to cancel $10,000 in student loans for student borrowers. However, Biden said he doesn’t believe he has the executive power to unilaterally cancel student loans without further authorization from Congress. (Biden canceled $15 billion in student loans). The probability of canceling a $50,000 student loan for student borrowers is close to zero. Congress won’t back him and neither will Biden, who backs $10,000 in student loan forgiveness for borrowers. Biden would, however, sign any legislation Congress sends him on student loan forgiveness. An important point that is often overlooked in the media: not everyone will be eligible for student loan forgiveness. (Here’s Who Won’t Get Student Loan Forgiveness). For example, Warren and Schumer’s proposal would only cancel federal student loans for student borrowers who earn up to $125,000 a year. These requirements could change, but in any event, 36 million student borrowers are unlikely to get their student loans forgiven.
With the end of student loan relief, there is no guarantee that there will be large-scale cancellation of student loans. So, spend some time evaluating your best options for repaying student loans. Here are a few: