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Biden promises forgiveness for a student loan. Student borrowers hope he will deliver.



For almost 15 years, Trygve “Spike” Magelssen says he has repaid his student loans every month, slowly breaking free from his initial debt of $ 53,000, even when medical bills, a home loan and other expenses have left him. “financially against a wall.”

Then, in late 2018, Magelsen, an associate professor of electrical engineering at Montana North State University, wondered if he could benefit from a temporary congressional expansion of the so-called public service loan forgiveness program. Public officials, including teachers, health professionals and law enforcement officials, may apply subject to certain requirements and must make payments of 1

0 years before the balance of the loan is cleared.

Trigwe Magelsen, an associate professor at Montana North University, has been paying off his student debt since 2004.Trigwe Magelsen

But after contacting the federal student loan office for help, Magelsen learned that his past payments could not be counted retrospectively. In addition, even if he signed up, he realized he could pay off the rest of his debt in less time than it took to reach the 10-year threshold.

“It was a dead end,” said Magelsen, 62, whose current student loan debt is about $ 21,500, consisting mainly of interest.

For borrowers like Magelssen who have failed to apply or may have qualified if they had known about the program earlier, they hope that the next administration under President-elect Joe Biden will give them a financial lifeline while protecting their interests. , especially during a pandemic that left millions of Americans jobless or underpaid.

These borrowers can get their wish.

Biden said he would tackle the forgiveness of loans to civil servants by providing $ 10,000 in student debt for each year of service, up to five years. This includes working in a school, government or non-profit organization. Student borrowers will be automatically enrolled, according to his plan, and previous “national or public services” will also allow the borrower to qualify.

The 45 million student borrowers carry about $ 1.7 trillion in student loans – less than total mortgage debt but higher than credit cards, according to the Brookings Institution, a Washington-based think tank.

“It needs to be done immediately,” Biden told reporters last week about his plan to forgive a student loan.

But he did not commit to other Democrats’ demands for a more comprehensive student loan forgiveness program or even a complete debt cancellation as part of his broader higher education program.

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During a press conference Tuesday, Senate Minority Leader Chuck Schumer, DN.Y., called on Biden to issue an executive order after taking office to begin his proposal to ease student debt.

“Higher education must be a ladder up,” Sumer said. “Student duty is an anchor around these children’s ankles.”

Sumer, along with Sen. Elizabeth Warren, D-Massachusetts and other Democrats, outlined a plan for Biden to take immediate action after becoming president, including using the executive branch to ensure there is no tax liability for federal borrowers.

Some economists and politicians are questioning the benefits to the economy if student debt is forgiven and how the Biden administration will pay its billions, which are expected to cost billions.

It is also uncertain who Biden will name to replace Betsy Devos as head of the education department. Meanwhile, student loan advocates say that if Republicans retain control of the Senate, a divided Congress could divert efforts to substantially reform student loans or make it harder for Biden to reverse certain policies adopted by the Trump administration.

A report published this week by experts and advocates of student loans entitled “Debt relief” states that approaches – administrative action or legislation – are not mutually exclusive and will depend on the circumstances and specific debt relief programs that the Biden administration will try to reform.

Student advocacy groups say the public service loan forgiveness program needs radical change. A 2019 government accountability report found that DeVos’ Ministry of Education rejected a staggering 99 percent of applications as part of an expanded loan forgiveness program.

“These programs are broken,” said Seth Frotman, executive director of the Center for Student Borrower Protection, a consumer protection group working on the report. “They are broken by incompetence in the Ed Department or by growing illegal practices of profit from colleges and predatory schools. The incoming Biden administration, with its most basic function, has a chance to improve the lives of millions of people.”

Biden also says he supports the forgiveness of student debt owed to those who have been deceived by colleges for profit.

DeVos has been criticized for hiring several insiders in the industry and for freezing Obama-era regulations that would increase student protection. But the education ministry defended its actions, saying employees were “highly qualified” and resigned when needed.

Teresa Sweet, a Gulf student borrower who was a leading plaintiff in a 2019 lawsuit against DeVos, said Wednesday that she had lost faith in the Education Department, which she said should protect students’ interests.

Her lawsuit, filed by attorneys with the Harvard Law School Predatory Student Loan Project, alleges that DeVos illegally stopped a program known as Borrower Protection to Repayment, a 90s ordinance that was extended to the Obama administration and says borrowers have been deceived by their schools qualifying for federal loans.

But after an agreement was reached in April in which DeVos did not acknowledge wrongdoing but pledged to judge the program immediately, the education ministry began issuing general waivers to borrowers – creating an ongoing legal dispute that could eventually end with the next administration. .

The education ministry did not immediately respond to a request for comment Wednesday after a judge ruled that borrowers would not have to make applicable loan payments until the case was resolved.

Sweet, an assistant nurse, said the Biden administration must enforce the law as written.

“If any of the next DOE secretaries don’t come out to swing to protect the borrower, I feel we will still have to fight,” she added. “And I will continue to fight until this situation receives some measure of justice.”


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