The impacts of different amounts of student loan forgiveness

The government’s stimulus response to the pandemic may accelerate the trend of companies offering student loan assistance as a benefit.

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Phyllis Wintter has had student debt for more than 30 years. At 67, she still owes around $48,000.

Now she hopes that change could be coming, and that President Joe Biden will forgive her loans.

“It would be great if we could die free of this debt,” said Wintter, who lives in Georgia.

But, she added, “$10,000 wouldn’t do it. I’d still have $38,000, and I can’t afford that.”

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The odds of student debt forgiveness becoming a reality have never been greater. President Joe Biden said on the campaign trail that he’s in support of cancelling $10,000 per borrower, and now he’s asked his education secretary to prepare a report on his legal authority to wipe out as much as $50,000 for all.

Yet even among those in support of cancelling education debt, there are disagreements, particularly over how big the relief should be and who should get it. For example, some have floated the idea of forgiving the loans of essential workers or only low-income Americans.

Higher education expert Mark Kantrowitz recently put a report together, comparing some of these different forgiveness plans and their potential impacts.

Below are some of them.

Forgiveness by age?

A growing number of Americans are bringing student loans into their old age. And many of them can’t afford the payments.

One-third of student loan borrowers over the age of 65 are in default, and half of those older than 75 have fallen behind, according to a report by the Government Accountability Office.

Although Wintter has avoided default, she said her student loans have made it impossible for her to qualify for a mortgage. She recently tried again, but was denied.

Phyllis Wintter

Source: Phyllis Wintter

For financial reasons, she’s currently living with her daughter but longs to have her own home, particularly at this point in her life.

“It would mean being able to be with myself for awhile,” Wintter said.

Cancelling student loans for people over the age of 65 would cost the government around $59 billion and impact 2 million people, according to Kantrowitz

The move wouldn’t be unprecedented. The Swedish government, for example, forgives the loans of all borrowers over the age of 68, and the United Kingdom used to have a similar policy.

By profession?

By income?

$10,000 or $50,000?

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