Americans with student loan debt are facing a $1.6 trillion question: What would President Trump do or Vice President Biden about all the money these 45 million borrowers owe to them?
What are the chances that either side would forgive their debts?
That’s two questions. Each one is worth $800 million.
Although we won’t know all the answers until after the election, both candidates indicated that increased student debt relief was on the horizon.
This is good news for those who have student loan debts totaling $1.6 trillion. The average student loan borrower owes $37,000. This is nearly enough to purchase a Tesla Model 3.
Trump Will Forgive Student Loans
While the president’s plan may make it easier for students to repay their loans, student loan forgiveness is unlikely.
Trump proposes a new approach to eliminate the Public Service Loan Forgiveness program (PSLF). This program forgives federal student loans to workers who are in a job that is qualified for public service or work for a non-profit.
Borrowers who are already in the program would not be affected by this move. It is possible that the government will not have to take billions in bad debt.
It may surprise many Americans that there isn’t a magical debt fairy who can wave a magic “Forgiveness wand” and make all those billions disappear. Someone has to pay the bill, and that person is going to be you.
Will Biden forgive student loans?
During much of his campaign, Biden was a strong proponent for student loan relief. Biden is now more open to social-justice protests and riots, as a result of the coronavirus pandemic.
Biden’s plan would forgo federal student loans to undergraduates who earn less than $125,000 per year and are enrolled in public institutions, historically black colleges, or private schools that serve minority students.
Biden would maintain the PSLF program, but revise the “F” portion. You would only be eligible for undergraduate loans, but you’d have to pay 5% of your discretionary income. The $25 monthly payment for Trump’s plan would amount to $10 under Biden.
What will the Second Stimulus bill do to student loans?
Because there isn’t a next stimulus bill, Congress’s next stimulus bill will not have any impact on student loans.
Actually, there were actually 2 bills. The Democrats had the mega-blowout HEROES Bill, while the Republican plan was the semi-blowout $1 Trillion HEALS Act.
After months of negotiations, the two sides couldn’t agree on how to divide the baby. Trump ended negotiations in October. Although a bill is likely to resurface in Congress’s next Congress, it is not known who or what the political makeup of that show will be.
- Which Candidate Should a Student Borrower Vote For – Trump or Biden
- Before you make a decision on a candidate, consider other factors.
While we don’t believe the economy, world peace, health care, terrorism and immigration reform are equally important, they are worth considering for at least a few seconds.
Consider also that the federal government has over $100 trillion in liabilities such as Medicare, Social Security, and the national debt. It’s going to be a difficult day for all of us.
That’s enough thinking.
We recommend that you never rely on politicians to help with financial problems.
Get certified credit counseling advice by calling a nonprofit. He or she will help you create a budget to get out of debt, without Trump or Biden’s assistance.
If you believe that the election will lead to student debt-free lives, then go with Joe.