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Home Blog Should Student Loans Be Forgiven? We Asked Our Audience: Here’s What They Said

Should Student Loans Be Forgiven? We Asked Our Audience: Here’s What They Said

The recent push for student loan forgiveness was driven by the pandemic; however, the consequence of high student loan debt has been an issue for far longer. The federal student loan portfolio has risen above $1.5 trillion dollars, and that does not include private student loan debt. We asked our ScholarshipPoints members their opinion about student loan forgiveness, and we received 1143 responses. Over 59% of our respondent’s support student loan forgiveness. More than 50% of our respondents believe that student loan forgiveness will help solve the student debt crisis.

Student loan forgiveness has been a topic much discussed over the last several years, however, the recent push began with the onset of the COVID-19 pandemic and many families found they were unable to work due to the nationwide shutdown, setting the stage for financial hardship. Many families have dealt with these negative financial consequences and the U.S. federal government responded by providing student loan debt relief to many federal student loan borrowers. The relief offered was in the form of a temporary 0% interest rate and no requirement to make a payment between March 13, 2020 through Jan. 31, 2022 for U.S. Department of Education owned federal student loans.

Will Student Loan Forgiveness Solve the Student Debt Crisis?

When asked if student loan forgiveness will solve the student debt crisis, 51.73% of respondents indicated “Yes” that it would. 27.94% were undecided, while 20.33% did not believe that student loan forgiveness would solve the student debt crisis.

While student loan forgiveness may help the student debt crisis for borrowers who already have outstanding debt, outstanding student loan debt is only one piece of this puzzle to tackle; it’s a bit of a reactive response.

There are other proactive approaches that need to happen to help and (hopefully) solve and slow down the growing student debt crisis. Implementing measures like, reducing the cost of college, and the reauthorization of the Higher Education Act that would allow for more financial assistance to help students pay for college without the need to borrow an unmanageable amount of money in the form of student loans.

Are Colleges to Blame for the Student Debt Crisis?

It’s no secret that the cost of college has increased substantially over time. According to the NCES (National Center for Education Statistics), the average total cost of tuition, fees, room and board for an undergraduate student at a private nonprofit college in the award year 2000-2001 was $30,916. In the 2018-2019 award year, that cost increased to $44,306—essentially over a 40% increase while the average annual household income in the U.S. only grew around 20% according to according to statistica.com.

There is more than one cause to the student debt crisis. When survey respondents were asked, Do you think colleges/universities should be held partially responsible for the student debt crisis? the majority of respondent (77.51%) believe that they should be, while 7.4% believe that they should not be held partially responsible, and 15.09% are undecided.

Many factors go into colleges determining tuition, fees, room and board. It boils down to prospective students having those early conversations with family members about college affordability and what options make the most sense. These conversations are incredibly important for students to plan for success instead of future debt.

Once a student determines what can affordably be spent out of pocket, and the amount that can comfortably be repaid, they can start looking at your college financial aid offers. When evaluating college options, students can start to make decisions based on budgets and borrowing limits.

More >>> Ways to Pay for College

Forgiving Student Debt: How Much is Fair to Forgive?

When we asked how much in student loan forgiveness is fair, 32.12% of respondents indicated that all outstanding student loan debt should be forgiven, 25.67% indicated they believe $25,000 was a fair amount to forgiven, 20.29% indicated that $10,000 in forgiveness is fair.

The amounts being discussed by the President and members of Congress has varied quite a bit. President Biden has supported $10,000 in student loan forgiveness. One of the most vocal members of Congress discussing student loan forgiveness, Senator Elizabeth Warren, has been proposing cancellation up to $50,000 for student loan borrowers which would eliminate all student loan debt for a large percentage of borrowers.

President Biden Student Loan Forgiveness Update

Ultimately student loan forgiveness remains in discussion, as no forgiveness plan has been approved and authorized. What is important to remember however, are the amounts don’t exactly describe what type of forgiveness we can expect to see if any amount were to be authorized.

Who would be eligible for student loan forgiveness? All student loan borrowers, both private and federal, or just federal student loan borrowers? If the forgiveness applies to all federal student loan borrowers, will it apply to all federal student loans? When we saw student loan debt relief offered because of the COVID-19 global pandemic, only federal student loans owned by the U.S. Department of Education qualified for the benefits. Leaving thousands of federal student loan borrowers with federal loans from older programs ineligible to take advantage of the deferment benefits.

In addition to the types of loans and borrowers that would be eligible for forgiveness, there are additional questions that need answers. For example, if student loan forgiveness were to be approved, would there be income requirements for borrowers? Meaning, would borrowers need to make under a certain income threshold to qualify, or would it be available for all borrowers regardless of financial status.

At this point in time, a broad reaching student loan forgiveness program has not been authorized by President Biden, the Secretary of Education or Congress. Some people may have received calls or emails saying “you’ve qualified for student loan forgiveness” be wary. Students will not be charged any fees or monies of any kind for student loan forgiveness should a plan be approved by the federal government. For those receiving unsolicited calls, be sure to report the incident to the FTC as fraud and do not provide any personal information, student loan servicing account information, or FSA ID.

For more information on our Student Loan Forgiveness Survey, please go to: Edvisors Student Loan Forgiveness Survey Results


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