Many borrowers took out student loans in anticipation of debt forgiveness, survey finds
During his run for the White House, President Joe Biden campaigns for forgiveness up to $10,000 in federal student loan debt per borrower. And it seems many borrowers have taken out student loans based on that promise, according to a recent survey.
Of those who have taken on student debt since Biden won the 2020 election, 86% said his campaign pledge affected their decision, according to a survey conducted by Intelligent.
Moreover, about one in three of those borrowers said they were unlikely to continue their education if Biden did not follow through on debt cancellation.
About 21% of survey respondents said they would have been unlikely or even highly unlikely to incur the same amount of debt had Biden not campaigned for student loan forgiveness. And about a quarter of borrowers also said they would not have continued their studies without the promise of debt forgiveness.
If you have taken out private student loans, you might consider refinancing to lower your monthly payments. Visit Credible to find your personalized interest rates without affecting your credit score.
Borrowers still expect Biden to forgive student loan debt
While there are currently no plans in place for widespread federal student debt cancellation, 70% of recent borrowers said they were confident or somewhat confident that Biden will cancel $10,000 in student debt. per borrower, according to the survey.
Biden said he is considering canceling student loan debt but has yet to give an official decision on when or how much. He, however, said he would not write off the $50,000 student loan debt that some Democrats called for.
“I’m looking at facing some debt reduction,” Biden told reporters at the White House in May. “I am not considering a $50,000 debt reduction. I am carefully considering whether or not there will be additional debt reduction and will have a response on that in the coming weeks.”
The survey also indicated that Biden’s decision on student loan debt could affect the votes of Democratic borrowers in the upcoming presidential election. Looking at respondents who identified as Democrats, 31% said they were unlikely to vote for Biden in the next election if he didn’t forgive any student loan debt. Another 23% said they were highly unlikely.
Currently, student loan repayments are suspended until August 31. And former White House press secretary Jen Psaki said Biden “will make a decision on any student debt cancellation before this pause on student loans ends.”
Although possible federal student loan debt forgiveness does not apply to private student loans, these borrowers might consider refinancing to lower their monthly payments. Visit Credible to compare multiple student lenders at once and choose the one with the best interest rate for you.
This is the amount of debt borrowers take on
More than 23% of students who took out student loans after Biden’s election victory borrowed between $5,000 and $10,000, the survey found. About 14% of borrowers had student debt between $10,000 and $30,000.
Total student loan debt has increased in recent years, reaching about $1.75 trillion in federal and private student loan debt in June, according to the Federal Reserve Bank of St. Louis.
In an effort to tackle the problem of student debt, Senator Sheldon Whitehouse, DR.I., introduces the Zero Percent Student Loan Refinancing Act last month that, if passed, would allow borrowers to refinance their federal student loans at a 0% interest rate.
“Heavy student loan interest payments can create a treadmill of debt that many Americans cannot escape. These interest payments often stand between borrowers and the financial freedom to focus on the future, whether it’s buying a home, saving for retirement or investing in their children,” Whitehouse said. “This bill will help people pay off their loans faster and get on with their lives. .”
If you want to pay off your private student loan, refinancing could help lower your interest rate and monthly payments. To see if this is the right option for you, contact Credible to speak to a student loan expert and get all your questions answered.
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