Last month, Former Vice President Joe Biden teamed up with Sen. Bernie Sanders (I-VT) and released the “Biden-Sanders Unity Task Force Recommendations”, a set of policy proposals that cover a variety of issues, including the environment, Medicare, immigration, and of course, student loans. The joint task forces between Biden and Sanders comes before the Democratic National Convention slated for August. The proposal is intended to present that Democratic Party as a united front and strengthen Biden’s appeal with Bernie supporters. If you’re wondering how exactly Biden plans to address student loans, you’re in luck. Below we list out the most relevant proposals, and how they would affect your student loan debt.
When it comes to student loan repayment…
- Biden calls for simplifying the current student loan repayment plan. According to Biden’s plan, borrowers who earn under $25,000 per year would not have to pay interest on their federal student loans and would not owe any payments.
- Biden wants to limit total payment on federal student loans to 5% of discretionary income for borrowers who make over $25,000 annually.
- Biden pledges to give automatic student loan forgiveness to any borrower who makes on-time payments for 20 consecutive years.
When it comes to canceling student loan debt…
- Biden has proposed canceling up to $10,000 in student loan debt for every borrower as a solution for the economic impact from COVID-19. This differs from Bernie’s proposal to cancel total private and federal student loan debt, about $1.6 trillion in all.
- Biden intends to forgive all undergraduate tuition for borrowers who earn $125,000 annually and forgive student loan debt for any borrowers who graduate from a private Historically Black Colleges and Universities (HBCU’s) and Minority-Serving Institutions (MSI’s).
When it comes to bankruptcy from student loan debt…
- Biden recommends allowing borrowers to expunge their student loans in bankruptcy. This is a turnaround from Biden’s initial stance as a U.S. senator when he opposed student loan forgiveness for bankrupt borrowers.
When it comes to tuition-free college…
- Biden wants to increase the maximum Pell Grant award by twofold.
- Biden also calls for tuition-free two-year and four-year public colleges and universities for borrowers who earn up to $125,000 per year. Meanwhile, Bernie recommends tuition-free college for all, regardless of income.
When it comes to Public Service Loan Forgiveness…
- Biden would forgive $10,000 annually in student loan debt for up to 5 years, which would total $50,000 per borrower.
- Teachers would be able to qualify for up to $50,000 in student loan forgiveness.
- Public Service Loan Forgiveness (PSLF) would use automatic enrollment, and all student loan forgiveness would be tax-free.
- It is important to note that Biden plans to limit the amount of loan forgiveness one could receive through the PSLF program.
Note: PSLF program has been plagued with issues for years and rejected over 147,000 borrowers. In fact, 99% of applicants have been denied by the program; that’s a lower acceptance rate than Harvard.
While the policies outlined above might be popular amongst our country’s student loan borrowers, many of these proposals are very unlikely to be passed in congress. there is no mention on how these initiatives will be funded and it is unlikely it will receive bipartisan support unless iti s wrapped up into a much larger legislation that has bipartisan compromises. while we can always hope that our politicians will come up with some solutions to fix our current student loan epidemic, it is best to come up with your own detailed plan for how you plan to payoff your student loans.