A new survey asked 1,000 borrowers what they think about Joe Biden’s plans for their student loans.
Here’s what you need to know.
The latest student loan debt statistics show that 45 million borrowers collectively owe more than $1.6 trillion of student loan debt. A new survey of 1,000 federal student loan borrowers examined several questions related to student loan forgiveness, student loan repayment and free college, among other topics. Here’s what they said:
Student Loan Forgiveness
- Cancel Student Loans: More than 70% of respondents “strongly support” or “somewhat support” various proposals to cancel student loans.
- Student Loan Forgiveness Proposals: Borrowers were asked about various student loan forgiveness proposals, including a plan to cancel $10,000 of student loan debt, a plan to cancel up to $50,000 of student loans, a plan to forgive college student loans for borrowers earning less than $125,000 annually, and a plan to cancel all federal student loans.
- Cancel $10,000 of Student Loans: Of the four proposals to cancel student loans, respondents preferred Biden’s plan to cancel $10,000 of student loans due to the Covid-19 pandemic. This plan is the relatively least expensive of the four plans for federal taxpayers.
- If borrowers receive student loan forgiveness, they said they would use the extra money primarily to save or invest, pay off debt or buy a home.
- Cancel Student Loans Through Executive Order?: Legislators and policy experts continue to debate whether Congress must pass legislation to cancel student loans or whether the president can cancel student loans through executive action.
- Compensation If You Already Paid Off Student Loans: More than 48% of student loan borrowers believe that anyone who recently paid off student loans should be compensated if Congress or Biden cancels student loans for current student loan borrowers.
Student Loan Repayment
- Student Loan Repayment: After Biden’s election, the majority of respondents made no changes to their student loan repayment or already were not making student loan payments due to student loan relief under the Cares Act (the $2.2 trillion stimulus package that temporarily paused federal student loan payments).
- No Student Loan Payments: 9.6% of federal student loan borrowers stopped making student loan payments after Biden won the presidential election.
- Smaller Student Loan Payments: 14.4% made smaller student loan payments after the election.
- Extra Student Loan Payments: While federal student loan payments have been optional for most of this year, many student loan borrowers have made extra student loan payments to pay off student loans faster.
MORE FOR YOU
Student Loans Are Due January 1, 2021
- Student Loan Payments Due: Absent an extension, federal student loan payments at your regular interest rate will resume on January 1, 2021.
- Covid-19 Student Loan Relief: This is because Covid-19 student loan relief expires on December 31, 2020.
- Skip Student Loan Payments: 14% of student loan borrowers plan to skip student loan payments beginning January 1. Why? They expect that Congress or the president will cancel student loans.
- Higher Student Loan Payments: 12.7% of student loan borrowers say they will make student loan payments above the minimum payment to pay off student loans faster.
- Can’t Afford Student Loan Payments: More than 35% of student loan borrowers say they won’t be able to make student loan payments or it’s unlikely they will be able to make student loan payments once Covid-19 student loan relief ends.
- Income-Driven Repayment Plans: If you are struggling to federal make student loan payments, contact your student loan servicer to enroll in an income-driven repayment plan. If you are already enrolled, make sure to update your discretionary income, family size and state of residence, which could impact your monthly student loan payment. You can also explore forbearance and deferment options.
- Biden Plan For Income-Driven Repayment: 44.9% of student loan borrowers would prefer the new income-driven repayment plan that Biden proposed.
Student Loans: Bankruptcy and Free College
- Cancel Student Loans In Bankruptcy: Biden supports a plan to cancel student loans in bankruptcy.
- As a U.S. senator, Biden did not support the idea of discharging student loans in bankruptcy.
- File For Bankruptcy: Nearly 38% of private student loan borrowers say they would file for bankruptcy to discharge student loans if the practice became more widely available under the Biden administration.
- Free College: More than 82% of student loan borrowers “strongly support” or “somewhat support” Biden’s plan to make public colleges and universities tuition-free for those whose household income is less than $125,000
Pay Off Student Loans
While this is only one survey, there are many ways to pay off student loans. Make sure you understand all your options so you can save money. Here are 3 smart places to start, all of which have no fees: