House Republicans voted to overturn President Biden’s student loan forgiveness initiative this week, raising more doubts and confusion for millions of Americans saddled with college debts.
Biden’s plan already faces a judicial challenge, with the Supreme Court expected to rule before the end of its term.
More than 43 million Americans have debts leftover from time spent in college.
The House measure is unlikely to pass the Senate, which is narrowly controlled by Democrats . If it somehow did, Biden has vowed to veto the measure and that would require an all-but insurmountable two-thirds vote in both chambers to override.
But for recipients of these loans, which many have called predatory, the debate churns up unease over their financial futures.
Student loan deferral was one of the numerous initiatives to alleviate financial stress during the covid-19 lockdown. But while payments were deferred, and still are under a Biden executive order, the borrowers still received credit for the time that passed. That’s important because for people who work in the public sector like firefighters or teachers, loans can be forgiven after the’ve made regular payments for a certain number of years.
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However, if the Republican plan went into effect, those time credits would disappear along with the forgiveness, and payments would have to resume, including back payments for the period of the deferment.
Some have noted the predatory terms of student loans. Thanks to compounding interest payments and interest rates as high as 35%, many with student loans feel trapped in a cycle of debt.
Zooming out further, several commenters were quick to point to the overspending that is already costing taxpayers — including defense spending. To make the point sharper, a fatefully-timed exposé recently revealed the gross over-expenditure of Pentagon funds. In March, the Pentagon received a record budget of $842 billion.
Student loan debt amounts to a whopping $1.78 trillion dollars in the U.S. The outcome of the upcoming election cycle will likely focus heavily on the issue.