Roughly 45 million Americans collectively owe $1.7 trillion in student debt. Many are hoping for student debt relief because the student debt crisis has gotten out of control.
In the past, the US subsidized higher education giving students a chance to work their way through school. But today, a college student working 40 hours a week at a minimum wage job would bring in a total of $15,080 per year — and during the 2019-2020 academic year, college cost $30,017, on average.
In the past 10 years, college costs increased by more than 16% and student debt increased by 99%, which means roughly 70% of college students take out loans to pay for their education.
Approximately $165 billion worth of federal-managed student loans are currently considered in default (typically defined as having gone at least 270 days without making a payment)— and this total may increase once the pause on federal student loan payments expires. Default impacts the financial freedom of borrowers and many may never be able to pay back what they owe.
Now, legislators appear to be seriously considering student debt forgiveness, but what is being proposed and why is it student debt forgiveness so controversial?
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Will Your Student Loan Debt Be Forgiven?