Student loan debt in the U.S. hit a record $1.7 trillion in 2021. (Cue the Dr. Evil gifs.)
That debt is split among 45 million borrowers, nearly 14% of the country's population, or the population of New York, Pennsylvania, and Ohio combined—give or take a few hundred thousand.
Sure, 10 grand could score you a 2009 Toyota Corolla S with 110,000 miles on it. (Note: This probably isn't the best use of $10,000 because, ideally, you don't want to buy a car with 100,000 miles on it, among other reasons. Also, President Biden isn't giving out cars like Oprah, nor is he handing you $10,000 to hit up your nearest "pre-owned" car dealership).
That said, $10,000 could put a nice dent in your student loan debt. And if you're lucky, it could completely eliminate your student loan debt.
How many people would be completely relieved of student loan debt?
If the Biden administration forgives $10,000 in federal student loan debt per person, roughly 1/3 of borrowers would be off the hook.
There are 15.3 million borrowers with $10,000 or less remaining on their federal student loan balance, broken down as 7.9 million with less than $5,000 and 7.4 million with $5,000-$10,000.
Most borrowers still would have a good chunk of change left to repay, though. The $20,000-$40,000 balance has the largest concentration, with 9.6 million borrowers falling in this range.
What about private student loans?
Biden's student loan debt forgiveness plan only would apply to federal student loans. So those with private student loans—about 2.4 million people—are SOL. Private student loan debt in the U.S. amounts to about $133 billion, so it's a much smaller amount overall than federal student loan debt, but it's split among a much smaller number of people. The average private student loan debt per borrower is more than $55,000.
If you're dealing with private student loan debt, especially if you have multiple private student loans, you can potentially reduce and speed up your student loan debt repayment by consolidating your debt. Plug your balances and interest rates into a debt consolidation loan calculator to get a sense of how much you could save and a debt-free timeline.
What if $50,000 in federal student loan debt is forgiven?
While this seems like a long shot, there's been chatter that Biden has considered relieving up to $50,000 per borrower in federal student loan debt through executive action, though Uncle Joe has expressed his preference to relieve student loan debt via Congressional legislation.
More than 34 million borrowers have $40,000 or less in federal student loan debt. And 4.2 million people have federal student loan balances ranging from $40,000 to $60,000. So, if Biden forgave up to $50,000 in federal student loan debt, more than 3/4 of borrowers would be done-zo with federal student loan debt.
But the rising cost of college in the U.S. is alarming, with or without student loan forgiveness.
According to U.S. News data, private colleges charged, on average, more than $35,000 a year. More than 138 private colleges and universities charge at least $50,000 a year. Universities like Columbia, Brown, and Duke cost more than $60,000 a year in tuition and fees for the 2020-21 academic year.
In the long run, we need to look at how to make college more affordable in the long term so students don't need to take on excessive amounts of student loan debt.
Press Release Service by Newswire.com
Original Source: What Does $10,000 in Student Loan Debt Forgiveness Look Like?
