Helping With Your Financial Future

Could there be a new plan for student loan debt?

On Behalf of | Jun 14, 2021 | Consumer Bankruptcy

Throughout California, many people are working to pay down debt. One of the most common sources of debt comes from student loans, so many individuals are turning to the nation’s president for relief from student loan debt.

What is President Biden doing about student loan debt?

President Biden has given support to the idea of canceling up to $10,000 of student loan debt per person. However, certain leaders of the Democratic party want him to do more. They’re calling for President Biden to wipe out up to $50,000 worth of student loan debt.

In March, President Biden forgave $1 billion worth of student loans for fraud victims misled by for-profit institutions. However, this forgiveness didn’t extend to other current and former students who collectively owe almost $1.7 trillion in student loan debt. Some debts can become so out of control that people must file for Chapter 7 bankruptcy. President Biden is awaiting a response from the secretary of education’s office to determine how to move forward with student loan debt cancellations.

A petition to eliminate student loan debt

Another large group began a petition through that is calling for a cancellation of all federal student loan debt. For this plan to happen, Biden would need to create an executive order. As unlikely as this executive order might seem, it’s worth noting that this petition has over 1 million signatures.

Many people hope that President Biden will fulfill promises to write off $10,000 worth of student loan debt per person, but it’s unknown whether a move to erase more student loan debt will come to fruition in the future. If former students are left responsible for all their debt, they may want to talk to a bankruptcy attorney about whether bankruptcy will ease the financial hardship created by student loans.