AOC: student debt “becomes ridiculous”, calls for general cancellation of loans
Representative Alexandria Ocasio-Cortez (DN.Y.) spoke on behalf of the Student Loan Debt Caucus last week to advocate for a blanket forgiveness of student loans.
“As a country, we are enjoying an insurmountable and crushing educational debt, and it is wrong,” she said.
The progressive lawmaker has been outspoken in urging President Joe Biden to write off $ 50,000 in federal student loan debt per borrower. But she’s not the only leading Democrat to call on the administration to cancel federal loans. Senate Majority Leader Chuck Schumer (DN.Y.) said the president could cancel student loan debt “with the stroke of a pen.”
As a presidential candidate, Biden campaigned to write off up to $ 10,000 in student debt per borrower. However, that was a tough promise to keep, and Biden signaled he didn’t want to use the executive branch to cancel student loans.
House Speaker Nancy Pelosi (D-Calif.) Has previously said that canceling student debt “must be an act of Congress.” Opponents argue that student loan cancellation comes at a high price that disproportionately benefits the wealthy.
Learn more about student debt cancellation below, and consider other student loan repayment options like student loan refinancing. Visit Credible to view student loan refi offers without affecting your credit score.
DO I NEED TO REFINANCE MY FEDERAL STUDENT LOANS?
AOC tells its story of student debt
In her December 2 speech, AOC drew on her personal experience as a millennium student loan borrower and first-generation college graduate to call attention to the issue of student debt “crushing” .
“Growing up, I’ve been told since I was a kid, your destiny is to go to college,” AOC said. “It’s what will raise our family. It’s our future. It’s what we’re here to accomplish.”
Ocasio-Cortez recalled that college recruiters visited his high school and told students higher education was worth it. In part, that’s because 65% of jobs in America require education beyond high school, she said.
“We are giving 17 year olds the chance to take on debt worth $ 100,000, and we believe that is responsible policy.”
HERE’S WHO QUALIFIED FOR STUDENT LOAN REDON PROGRAMS UNDER BIDEN
Now 32, AOC said she has over $ 17,000 in student loan debt since graduating undergraduate degree. She didn’t go to college, believing she couldn’t afford to borrow more student debt.
Ocasio-Cortez referred to statistics from the Federal Reserve, saying first-generation students like her are twice as likely to report being behind on their student loan payments. She also said that hundreds of thousands of borrowers now have higher loan balances than when they first borrowed them because of interest.
If you’re having trouble getting over your student debt, refinancing is an option to help you pay off your loans faster at a lower interest rate. Student loan refinancing rates are near historic lows, Credible data shows. You can browse student loan rates from real private lenders in the table below.
US DEPARTMENT OF EDUCATION CANCELED $ 1.5B IN STUDENT LOANS THROUGH BORROWER DEFENSE
‘Ridiculous claim’ that student debt cancellation benefits the rich
Opponents of student debt cancellation argue that loan cancellation would disproportionately benefit high-income Americans. The Becker Friedman Institute for Economics at the University of Chicago found that forgiving all student loan debt would allocate $ 192 billion to the richest 20% and only $ 29 billion to the poorest 20% of households. low income.
Despite claims that canceling student debt benefits wealthy Americans, Ocasio-Cortez has dismissed this as a false narrative.
“Do we really think a billionaire’s kid takes out student loans?” she asked. “If you take on student loan debt, it’s because you’re probably a worker or a middle-class person.”
AOC’s statement is backed up by a recent report from the Roosevelt Institute, which states that “people from wealthy backgrounds (and their parents) rarely use student loans to pay for their college education.”
BORROWERS START RECEIVING $ 2B UNDER LIMITED PUBLIC SERVICE LOAN FORGIVENESS WAIVER
Forbearance on student loans gave borrowers a ‘breathing space’
Payments on federal student loans have been on hold since March 2020, when then-President Donald Trump enacted the CARES Act. The Department of Education has extended the federal forbearance period until January 2022.
AOC used the deferment period as an example of how young borrowers can qualify for student loan forgiveness. She said the forbearance gave borrowers “leeway” to meet other financial obligations, such as buying homes and starting a family.
But without further policy action, federal direct loan payments are expected to resume in February 2022. A recent survey found that 9 in 10 borrowers who work full-time will not be able to make their monthly payments after forbearance ends.
One option for making student debt payments more manageable is to refinance to a longer term repayment plan. A recent analysis by Credible found that borrowers were able to reduce their monthly payments by more than $ 250 by doing so. Use a student loan refinance calculator to determine if you can save money on your outstanding college debt balance, and visit Credible to begin the application process.
FEDERAL STUDENT ASSISTANCE (FSA) BEGINS INFORMING BORROWERS OF STUDENT LOAN SERVICE CHANGES
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