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President Biden signed an exertive order that provides debt forgiveness to students to 45 million borrowers that struggle with student debt. Many have cried foul about the fairness of this order and the economic impact upon the economy. Inflation with sky rocketing prices many have said this is a giveaway that we simply cannot afford. President Biden “cited the Heroes act which Congress passed in 2003 in the wake of 9/11 and the beginning of the Afghanistan war. Lawmakers at the time allowed the White House to grant relief to students in any way it” “Deems necessary in connection with a war or other military operation or national emergency”. (Yahoo news) There seems to be still a consensus that there will be legal challenges.

President Biden made this a campaign promise during his election campaign and he is giving many the opportunities to get out from under massive debt. Since 1980 cost for a four year degree has nearly tripled. Low and middle class families have no choice but to borrow to attain a degree and make an attempt to climb the economic ladder for the American dream. Nearly one- third of borrowers have debt but no degree and about 16% of borrowers are in default, including nearly a third of senior citizens. Student debt falls disproportionately on black borrowers.

The order cancels 20,000 to Pell grant recipients and up to 10,000 of debt to non-Pell grant recipients. Black borrowers are twice as likely to have received a Pell grant compared to their fellow white students. Borrowers are eligible for this relief if their individual income is less than $125,000 a year and $250,000 for married couples. Borrowers should expect to resume payments in January 2023. The Biden administration has a cap on undergraduate loans at 5% of a borrower’s discretionary income which is about half the rate that is paid now. https:Whitehouse.gov/briefing room.

Investment or Giveaway... you decide.