This relief would transform the lives of millions of Americans, especially poor, low-income and minority communities, narrow the racial wealth gap, and provide a much-need shot in the arm to our economy. "The time is now for the president to use his authority to cancel up to $50,000 in student loan debt. “Student loan forgiveness has the power to unleash a wave of consumer-driven growth in this country - and President Biden does not need Congress to do it,” Menendez said. The monthly payment amount you’ll be offered will be based on your income, so it should be affordable. "Simply extending the current executive action to defer loan repayments and cancel interest would achieve much of the economic benefit of loan cancellation at only a very small fraction of the cost," the committee's report states.īut according to Menendez, bolder moves are needed to level a playing field that's been unfair for far too long. Loan Rehabilitation To rehabilitate most defaulted federal student loans, you must sign an agreement to make a series of nine monthly payments over a period of 10 consecutive months. Researchers said that while student loan forgiveness would increase cash flow by $90 billion per year, it would come at a cost of $1.5 trillion. The bipartisan Committee for a Responsible Federal Budget recently argued that canceling student loan debt would be a poor stimulus to the economy. Some experts have criticized the drive to cancel student loan debt. “When you’re barely keeping your head above water, it is nearly impossible to make a dent in your student loan principal,” Menendez emphasized. “For far too long, incomes have failed to keep pace with the rising cost not only of education but also health care, housing, child care, and other basic living expenses.” “That financial nightmare existed long before the COVID-19 pandemic laid bare the deep disparities that exist for communities of color and low-income communities,” he continued. “For many New Jerseyans, particularly people of color, crippling student loan debt has turned the promise of a college education into a financial burden that plagues them for decades,” Menendez said. More than 43 million Americans hold a combined $1.6 trillion in federal student loan debt, with more than 9 million borrowers in default. This week, groups including Public Citizen, the Student Debt Crisis Center and the Student Borrower Protection Center are hosting a “Week of Action” to push for federal student loan cancellation.Īccording to Lending Tree, there are an estimated 1.3 million borrowers in New Jersey holding $48.8 billion in public and private student loan debt, with an average balance of more than $33,000 or bills of $310 per month on average.
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