It’s no secret – student loan debt is a serious problem for Americans. But change may soon be coming.
The 2020 presidential election will mean big things for those burdened by student loans with major plans and shake ups on the table from both parties.
Will student loans be partially forgiven? Will repayment options change for the better?
Find out what the student loan landscape could look like in the United States if Joe Biden becomes the 46th president.
2020 U.S. student loan debt data
Wondering how deep the total student debt hole is in America? $1.64 trillion.
Meanwhile, the average student loan borrower is weighed down by a gloomy $29,650 in college loans.
Here are some additional statistics on where our country’s student debt currently stands:
- Average time to pay off student loan debt: 21.1 years
- Average monthly student loan payment: $393
- Average student loan interest rate: 5.8%
Joe Biden’s views on student loans
Joe Biden believes there are certain key drivers to the student loan problem in America including:
- The increasing cost of higher education which has about doubled since the 1950s
- The decreasing investments in higher education at the state level
- Paying for a degree that too often doesn’t add value to graduates in the job market
He has stated that college students deserve more opportunities to get a degree for free based on their personal and financial needs.
In fact, one his many proposals regarding student loans is to nip rising college debt in the bud by making public colleges and universities tuition-free for all families with an income below $125,000.
Additionally, he believes that the rising cost of a higher education means relief efforts must be put in place. He understands that young college grads are struggling to make ends meet, start a family, buy a home, and accomplish other financial goals that used to be taken for granted. He has also spoken in-depth about the shrinking middle class and the immense stress they’re currently feeling on their budgets.
His view is that respite from ever-rising college costs and monthly loan payments must be provided by the government for student loan borrowers in the form of forgiveness and other aid.
Joe Biden’s plan to address student loan debt
Biden’s proposals surrounding student loan debt are multi-faceted. One of his most impactful plans includes full student loan forgiveness for undergraduate tuition related student loans – but only for borrowers that meet specific criteria.
This forgiveness would only help those with debt from two-year and four-year public universities and colleges. And in order to qualify, the borrower would need to earn less than $125,000 per year.
In addition, another proposal is in place to support student loan borrowers with any federal student loan who earn over $25,000 per year. This aid would ensure that they would not have to pay any amount over 5% of their total discretionary income toward federal loans held by the government.
Also on the table is complete forgiveness for any federal student loan debt after a 20-year period of payments. This plan would eliminate all income tax on the amount forgiven as well – making it a “true” form of forgiveness with no strings attached.
Lastly, a stipulation has been discussed specifically for qualified for the Public Service Loan Forgiveness program to receive $10,000 per year in loan forgiveness for a period of up to 5 years.
Clearly, student loan debt is a central issue of Joe Biden’s presidential platform with a variety of relief initiatives planned.
At this point, however, these ideas are simply proposals with nothing set in stone until the election is complete and any plans regarding student loan aid are officially put into motion.
How to make student loan debt easier to manage now
No matter what happens in the 2020 presidential election, you still hold the power to make your student loans easier to manage on your own.
A more immediate way to affect your student loan debt is student loan refinancing.
If you haven’t considered student loan refinancing before, now is one of the best times in history to research your options. Student loan refinance rates are currently at all-time lows and there is serious competition for your business from top refinance lenders.
Refinancing is an effective strategy for student loan borrowers to:
- Save money with a lower rate: For qualified borrowers with good credit, you could be offered much lower interest rates – allowing you to save big while paying down your debt.
- Lower your monthly payment: Refinancing provides the opportunity for qualified borrowers to extend their repayment term – sometimes up to 20 years. This could significantly drop your monthly student loan bill and ease the stress on your budget.
- Pay off your debt sooner: With refinancing, you also have the chance to shorten your repayment plan. If your goal is to wave goodbye to debt one and for all, a shorter term will let you ditch debt fast while saving on total interest accrued.
- Consolidate your student loans into one: Refinancing also combines all your student loans – both federal and private – into one new loan. You’ll have just one payment to manage with one servicer to greatly simplify for your finances.
If any of these benefits align with your student loan payoff goals, it may be a smart idea to research your student loan refinance rate and term options.
Luckily, Purefy makes it quick and easy to check if you qualify for a student loan refinance – and see the rates you’re eligible for from a variety of top lenders. All at once and all in one place, with no impact on your credit score.
Simply take less than 5 minutes to fill out some basic information about yourself with our Compare Rates tool. With all your options in front of you, you’ll be on your way to deciding if student loan refinancing is right for your needs.