“the Intersection Of Student Loans And Taxation: What You Need To Know” – Some students at Ithaca College see President Joe Biden’s plan for federal student loan debt forgiveness as a first step in addressing the cost of higher education.
Biden announced on August 24 that the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with federal loans and up to $10,000 in debt cancellation to non-Pell Grant recipients. To qualify for debt cancellation, all borrowers must have an individual income of less than $125,000. The federal loan payment freeze is also being extended a final time to December 31, 2022. The payment freeze has been in place since March 2020 and has been renewed seven times.
“the Intersection Of Student Loans And Taxation: What You Need To Know”
According to the Education Data Initiative , as of July 2022, US student loan debt totals $1.7 trillion, spread among 43 million borrowers, while the outstanding balance of federal loans — loans borrowed only from the federal government, not at private loan companies — is $1.6 trillion and represents 92.7 percent of all student loan debt.
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Shana Gore, executive director of Student Financial Services, said she believed the plan was a step in the right direction to help students and families with college debt and that the college supports any measures that can improve access to education.
“I think some of the administrative aspects of the plan — how it will be implemented specifically by the government, the application process, how the data will be collected — those are things we’re talking about with our colleagues at other, larger institutions. educational organizations and we await additional information so we can be well educated on all the details and see how we can best help students and alumni take advantage of this program,” Gore said.
Gore said that in 2021, 99 percent of college students received some kind of financial aid, and in any given year, about 20 percent of college students are eligible for a Pell Grant.
Pell Grants are awarded to 34 percent of undergraduate students in the U.S., according to the Education Data Initiative, and the average Pell Grant award for a student at a private four-year university is $4,257. Federal Pell Grants are available only to low-income students who demonstrate exceptional financial need and, unlike loans, do not have to be repaid.
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“I think right now we’re waiting for the details to be worked out by the government so we can find those opportunities so we can make sure we’re helping students best understand how to benefit from the plan,” Gore said. “I think that’s often a problem with some of these federal programs, is making sure that everyone who’s eligible can take advantage of them. So we’re going to see what kinds of measures we can take and how we can be proactive with that.”
Chee Ng, an assistant professor at the Department of Finance and International Affairs, said these arguments depend on the effectiveness of how the plan is implemented.
“I’m sure President Biden’s proposal has the means-tested mechanism built in to be ‘fair’ so that higher earners don’t take advantage of the system unnecessarily,” Ng said via email. “But circumventing any regulation is just a natural human response. Any imagination otherwise is simply altruistic at best and will result in an implementation fiasco.”
Junior Lily Kimball Watras said the debt relief plan will help her pay off about half of her student loan debt, and after learning about the plan, her father encouraged her to sign up as soon as possible.
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According to the announcement, the Department of Education is working to establish an application process for borrowers to apply for relief. The application will be available no later than when the federal loan repayment break ends at the end of 2022.
Kimball Watras said he believes student loan debt is a concern for most students, and that while $10,000 is a good amount, it’s not enough for many people to cover the full size of their loan debt.
According to a Pew Research study, 36 percent of 25- to 39-year-olds who have at least a bachelor’s degree and outstanding student loan debt said the financial costs of their degree outweigh the benefits, while 15 percent of young college graduates who didn’t have an outstanding loan. student loans say the costs outweigh the benefits.
“I hope there will be more in the future,” Kimball Watras said. “I mean, there’s a lot going on and I don’t know if it’s going to be something that’s going to be on everybody’s mind, but I hope it is.”
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Sophomore Aiden Harman said he thought the plan was a step in the right direction because of the financial inaccessibility of higher education in the United States, but he felt it was disadvantageous for people struggling to pay for college, who barely can qualify for those loans or people. who received loans through a private bank.
According to the Education Data Initiative, the average cost of college in the US for a first-time full-time undergraduate student is $35,551 per student, per year. The average cost of college has an annual growth rate of 6.8%.
Harman said he has qualified for the Pell Grant, but has no loans taken out through the federal government.
“I fall into the notion of people who don’t make that much money in this country,” Harman said. “So I just wish that what would have been worked into this would have been that all the people who qualified for the Pell Grant would at least get a little bit of money, whether it’s in the form of a check or something, instead of simply canceling the government. loans.” Open Access Policy Institutional Open Access Program Special Issues Guidelines Editorial Process Research and Publication Ethics Article Processing Fees Awards Testimonials
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Biden’s Student Loan Dilemma
US Student Debt Delinquency and Default in Proportional Response to Unemployment and Average Debt Per Borrower
By José Alberto Fuinhas José Alberto Fuinhas Scilit Preprints.org Google Scholar 1, * , Victor Moutinho Victor Moutinho Scilit Preprints.org Google Scholar 2 and Estefano Silva Estefano Silva Scilit Preprints.org Google Scholar 3
Received: 27 May 2019 / Revised: 13 August 2019 / Accepted: 15 August 2019 / Published: 1 October 2019
We investigate the response of the proportion of student loan borrowers ninety or more days delinquent or in default to variables such as unemployment and average debt per borrower after the 2007–2008 financial crisis in the United States, using 50-state panel data from 2008 to 2015. The proportion of borrowers delinquent or in default was modeled by unemployment, average debt per borrower, consumer sentiment, and financial stress using a binomial logit and probit model. Specification tests claim that no relevant variable has been omitted. Unemployment and average debt per borrower are statistically significant contributors to delinquency or default in the 50 states in the panel sample. The results also reveal a differential impact of unemployment among the four regions considered by the US Census Bureau.
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Student debt and default have been a hot topic of research in recent decades, and most of these studies focus on the United States. Indeed, student loan debt is becoming a major concern for the US economy. It is the second largest consumer debt after mortgages and larger than credit card debt and car loans. Student debt was approximately $1.3 trillion at the end of 2016, a 170% increase from 2006. The reasons for this increase are more students taking out larger amounts of loans and slower repayment rates. This paper aims to study the response of the proportion of US student borrowers ninety or more days delinquent or in default to variables such as unemployment and average debt per borrower at
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