Impact of $10,000, $50,000 or full relief
About 12% of Vermont’s population stands to gain extra money in their pockets and greater financial freedom if the Biden administration moves forward with student loan forgiveness.
Considered one of most educated statesVermonters are also saddled with piles of debt.
Among Vermont’s roughly 77,000 borrowers, there is about $2.9 billion in federal student loan debt. This represents an average debt of $37,000.
Here is an overview of the debt relief proposals on the table and what is already available for student loan relief.
What would $10,000 student loan forgiveness look like in Vermont?
In addition to the extended pause in student loan repayment due to the economic impacts of the COVID-19 pandemic, the president said he was considering pardoning $10,000 for every American with unpaid federal student loan debt.
In Vermont, that would mean 23,000 people would automatically have their debt unpaid, according to the Vermont Student Assistance Corporation (VSAC).
What would $50,000 student loan forgiveness look like in Vermont?
Senator Elizabeth Warren, D-MA offered to pardon $50,000 for those earning less than $250,000 per year. A plan of this nature would completely eliminate student loan debt for 57,000 Vermonters.
Senator Bernie Sanders calls for erasing all student loan debt
Vermont Senator Bernie Sanders has for years been a proponent of eradicating student debt all at once, which was a core issue when he ran for president in the 2020 election. use a Wall Street transaction tax to pay the $1.6 trillion price owed to creditors. Unlike other proposals that only apply to federal student loans, his plan includes private loans such as those obtained through a bank.
Sanders recently joined activists at a protest outside the White House and on Twitter shared the remarks. “The federal government bailed out the banks. Trump and the Republicans gave huge tax cuts to the wealthy. Congress is about to hand over $10 billion to Jeff Bezos to go to the moon,” he wrote on April 27. “Yes, we can afford to cancel all student debt.”
Relief for proposed loans:Biden is looking closely at student loan debt forgiveness
Student Loan Help Available Now
For those who cannot wait for the government to decide whether their loans will disappear in part or in full, there are now assistance and forgiveness options.
the Income Oriented Repayment Program helps those whose debt is more than they can afford to pay. In Vermont, about 16,000 borrowers who owe about $1 billion in loans currently participate in the program.
the Civil Service Loan Cancellation Program, recently expanded, cancels student debt for those who work for at least ten years in the public or voluntary sector. Types of eligible jobs include teachers, firefighters, nurses, military, and civil servants.
Who does student loan forgiveness help the most?
About 45 million Americans would benefit from having less or no student loan debt and could spend more money on other needs or reinvest in the economy.
In Vermont, a majority – 62%, of borrowers are 35 and under. Nationally, about 40% of all student debt is held by people who were pursuing a graduate degree or higher.
Student loan debt has hit black students harderwho have, on average, borrowed more and have a higher total amount of debt.
Contact reporter April Barton at [email protected] or 802-660-1854. Follow her on Twitter @aprildbarton.