Lawmakers have been calling upon President Biden to move forward with an executive order that would cancel up to $50,000 in federally backed student loan debt. Other amounts have been considered, the lowest amount being $10,000. How this cancellation would look across the country would vary, however, depending on the state and the borrower.
According to the Student Loan Hero, $10,000 in student loan forgiveness would cost approximately $315 billion. This amount of loan forgiveness would erase outstanding student loan balances for 34 percent of all student loan borrowers, according to their review of Department of Education data.
Student Loan Hero found that, of the $1.7 trillion in federal student loan debt held by borrowers nationwide, $1.3 trillion of it would be eligible for cancellation under the proposed orders.
The data showed that cancelling $10,000 in student loan debt would make the biggest impact in states with smaller populations of student loan borrowers. For example, in a state with sparser population, such as Wyoming, 38 percent (38%) of borrowers would have their entire balance forgiven. Similarly, 37 percent (37%) would have all their loans forgiven in Utah, while 36 percent (36%) of Nevada borrowers would see their entire balances erased.
On the other end of the spectrum, only 29 percent (29%) of Maryland or Virginia borrowers would see their loans forgiven.
In Florida, 31.5 percent (31.5%) would see their loans completely forgiven with a $10,000 cancellation. This cancellation would affect 2,313,800 Florida borrowers.
A study from the foundation for Research and Economic Opportunity found that states where blue-collar industries were widespread were more likely to have taken on smaller loans to obtain either a certificate or associate’s degree, meaning the average student loan borrower would be holding less debt. However, states where more individuals pursued a college degree in general would benefit more from the $10,000 in loan cancellation.
Democratic lawmakers insist that $10,000 is not enough to make a significant contribution to the nation’s total student loan debt. Senators Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) are urging the President to consider cancelling $50,000 in student loan debt through an executive order.
President Biden is currently considering his options and has asked the White House Chief of Staff to prepare a memorandum discussing his legal authority to issue such an executive order. Congress is also concurrently holding hearings to discuss the current national student loan debt crisis.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.