Friday, June 2, 2023

Millions Await Decision on Biden’s Student Loan Forgiveness Promise

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Eleanor Cruz could get $20,000 in student loan forgiveness if the Supreme Court approves the Biden administration’s program. “Hopefully, maybe one day I can finally find a home,” he tells STT.

In the United States, millions of people await a Supreme Court decision on whether to cancel up to $20,000 of their student loans. Student loan forgiveness has become one of the major points of contention between the Republican Party and the administration of President Joe Biden.

Last fall, the Biden administration announced a program that would cancel federal student loans for 43 million people. The program is targeted for people with low and middle income. Loan forgiveness of $10,000 to $20,000 will be available to people with an annual income of less than $125,000.

According to the White House, its purpose is to provide relief to the borrowers after the economic crisis caused by the Corona epidemic in the country.

Republican politicians didn’t like the idea, and six Republican-led states took the law to court. According to him, the loan waiver would cause significant damage to the finances of the states. However, documents released in May suggest that, for example, in the case of the state of Missouri, the claims were not true.

However, opponents of the reform managed to freeze the implementation of the program. A Texas court halted progress on the program on 10 November. According to the White House, by that time 26 million people had applied for loan forgiveness and 16 million applications had already been approved. Now millions of people are waiting for the decision of the Supreme Court of America in this matter.

A Supreme Court hearing on the matter was held in late February. The key legal question is whether the Biden administration had the authority to make such a major decision without Congressional approval. The country’s Department of Education approved the decision under a law passed during the administration of President George W. Bush. The law gives the Minister of Education the authority to make decisions on changes to student loan programs, if necessary, if it is a national emergency.

The Supreme Court is expected to decide on the matter in late June or early July.

Eleanor Cruz, 28, of Denver, Colorado, is one of the alumni awaiting a decision. He studied a bachelor’s degree in education at the University of Portland and received a master’s degree from Concordia University in 2019.

According to Cruz, four years of basic study costs approximately $60,000 per academic year, and a one-year master’s program costs $15,000. Cruz financed most of his studies through scholarships, savings and working alongside his studies. Student loans total $30,000.

Cruz’s loan amount is typical for Americans. According to the country’s Ministry of Education, graduate students who have taken out loans have an average of $25,000 in student loans upon graduation.

Because Cruz received a federal grant aimed at low incomes as part of his student loan package at the time, he was able to apply for the maximum amount of $20,000 loan cancellation.

– It’s a big deal. 20,000 is more than half of my loan, Cruz told STT.

Borrowers from low-income households struggle to pay off their student loans more than others, according to the Ministry of Education, and bankruptcy is a more likely threat to them. According to ministry estimates, about 27 million applicants would be entitled to loan forgiveness of up to $20,000.

The program also aims to promote equality among diverse groups, as black students are twice as likely to receive support for the poor than white students.

After graduation, Cruz worked as a teacher for a few years, but now she works as a midwife. According to the current plan, it will take him ten years to repay the loan.

If I had a significantly smaller amount of debt, I could put the money I spent on loan repayment into savings and hopefully someday eventually get a home, Cruz thinks.

In the United States, fees for four years of basic study have nearly tripled since 1980, even when taking into account inflation and federal support has not increased at the same pace.

For Eric Petrozino, 30, a native of eastern Pennsylvania, the most important factor in choosing his future degree program was moderate tuition fees.

Petrozino completed his undergraduate degree at Bloomsburg State University, where he studied political science. He completed his three-year master’s in law at West Virginia University, from which he graduated in 2017.

– Both were state schools, ie cheap public universities. West Virginia Law School is Affordable. I even got a small grant there, Petrozino told STT.

Despite the relatively cheaper options, Petrozino accumulated a total of $160,000 in debt over a total of seven years of study. This is despite the fact that Petrozino held at least one job during his studies. With interest, the loan managed to grow to over $15,000.

However, Petrozino is not particularly concerned about his debt, as he has worked as a lawyer in the public sector since graduation. If government employees work for the government for more than 10 years and pay their loan in proportion to their income during this period, which is ten percent of the salary every month, then their balance student loan can be forgiven. Could This is also Petrozino’s plan.

Petrozino applied for $10,000 in student loan forgiveness in the fall, but has not made a decision on the matter.

– For me personally, it has little impact, as I am in a privileged position, but millions of other people are not and for them it would mean a lot, says Petrozino.

Republicans have opposed Biden’s program, calling it unfair to other taxpayers. He has said that it rewards already rich people who have obtained college degrees.

Senator Bill Cassidy of Louisiana said in March that Biden would shift the burden of student loans from borrowers, voluntarily passing them on to those who have decided not to go to college or avoid their obligation to pay back their student loans. have completed

“It is grossly unfair to punish these Americans by forcing them to foot the bill for these irresponsible and unfair student loan schemes,” he continued.

Senator Bob Good of Virginia made similar comments.

– President Biden’s so-called student loan forgiveness program will not make debt disappear, it will only shift the cost of hundreds of billions from student loan holders to taxpayers, the senator said.

According to Eric Petrozino, it is a culture war that seeks to provoke confrontation between the educated population and others. He thinks it is dishonest to claim that the program rewards the wealthy and punishes the less wealthy.

– Anyone earning more than $125,000 in a year is not eligible. Most applicants live in residential areas where the median annual income is low, closer to $70,000, says Petrozino.

He says that it is also not true that anyone who studies in a university is rich.

Not everyone who took out student loans ever graduated. And not all graduates manage to find jobs in their fields, he continues.

According to the U.S. Department of Education, nearly a third of those who take out student loans for graduate degrees do not have a degree. According to the ministry, many students could not complete their studies because it was too expensive.

Petrozino reminds us that there are winners and losers in every political decision and that the program is aimed at the middle class.

The purpose of this program is to help people due to the once in a century global pandemic. Small businessmen, rich people and big companies have also got help. It is disappointing that this is causing so much backlash.

Eleanor Cruise says that history must be understood when discussing the show. Financial conditions have changed, and the burden of student loans has become much more significant than in previous generations.

– People have to take a huge loan as the degree fee has increased in the last 50 years. Cruise says, there has been an increase of $10,000 in tuition fees for my studies since I started my studies.

Cruz’s application had time to process and was approved before the program was suspended in late autumn. He’s frustrated with the Republican stalling.

– I hope both sides will be able to cooperate and more care will be shown towards the people in debt.

Cruz doesn’t believe the program will pass the Supreme Court, where a majority of justices are conservative.

– Honestly, I have faith that it will be stopped, but I can be hopeful.

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