HUNTSVILLE, Ala. (WAFF) – The big news of student debt relief is something some thought would never happen.
“I was shocked,” said Jasmine Lawry of Alabama A&M. “Biden has been talking about it for a while, and I thought he was joking, but to see him in action, I think it’s cool.”
The Department of Education will forgive up to $20,000 to Pell Grant recipients and up to $10,000 to non-Pell Grant recipients. Student loan debt in the country stands at $1.6 trillion, with student loan debt having a disproportionate effect on African American borrowers. Alabama A&M student Miya White says $10,000 might be just what people need to boost their disposable income.
“We could do more things with our money,” she said. “We could put him back in our families if we wanted to. I mean, we’re in a time where entrepreneurship is a big thing and generational wealth is now a big thing. And a lot of people of color in particular are trying to do that.
Debt relief will not be treated as taxable income for federal income tax purposes. The Department of Education estimates that 21% of borrowers eligible for relief are 25 years of age or younger. 44% are between 26 and 39 years old. More than a third are borrowers aged 40 and over, including 5% senior borrowers.
Fellow Bulldog Amaya Hall says she has heard the fairness argument towards those who have repaid their loans, saying: “I think their feeling is right, that they had to struggle to repay their loans, but in same time, I feel like they should be relieved that their kids and so on don’t have to worry so much about paying off those school loans.
For undergraduate loans, this three-part plan will reduce the amount borrowers must pay each month from 10% of their Discretionary Income to 5%.
For example, a typical single public school teacher with an undergraduate degree earning $44,000 a year would only pay $56 a month on his loans with this new plan, compared to the nearly $200 he currently pays under the newest income-based program. repayment plan.
Copyright 2022 WAFF. All rights reserved.