September 24, 2021

Who Would Pay for Student Loan Forgiveness?

Forgiveness

A college degree can provide you with the tools you need to achieve economic stability. However, as with most worthy investments, finishing higher education comes with hefty costs. Recent Federal Student Aid figures reveal that the total outstanding federal loan debt has reached $1.6 trillion.

With debt burdening millions of Americans, national platforms have raised debates on student loan forgiveness payment solutions. This article will go through government leader proposals and repayment options when forgiveness is not possible.

Student Loan Forgiveness Proposals

Senators and presidential candidates Bernie Sanders and Elizabeth Warren suggest canceling student loans for 100% and 95% of borrowers, respectively. Both government leaders would fund their proposals through new taxes.

Sanders’s proposal seems more favorable for students; he wants to forgive all outstanding federal and private student loans. Additionally, he moves to waive all requirements and make all borrowers eligible for student loan discharge.

Moody’s Investors Service assessed the implications of student loan cancellation. These are some of its benefits:

  • A slight increase in household spending and investment
  • The formation of more businesses and households
  • Long-term homeownership growth

However, below are some of the drawbacks.

  • Lost revenue: The federal government would lose an estimated $85 billion in forfeited loans, interests, and other fees.
  • Doubtful intentions: Some student borrowers might end up borrowing more money, knowing that the government will waive their debts.
  • Increased loan motivation: Future students may apply for higher loans that the government may not forgive. This scenario will leave more people burdened with massive debt.

Forgiving 100% of student debt may not be the ideal solution for the country today. The risks far outweigh the benefits.

This situation leaves borrowers with a daunting question: What are their repayment options?

Student Loan Repayment Options

While not everyone can qualify for loan forgiveness, you can apply for it. To pursue a forgiveness option, check your eligibility here.

As we may not experience universal student loan forgiveness soon, it’s essential to understand your repayment options.

Student Loan Refinancing

Through student loan refinancing, a private lender pays off your debt in exchange for a new loan. With the correct payment solutions, you can enjoy lower monthly rates. You can use your savings for other investments.

Student Loan Consolidation

Student loan consolidation combines various debts with different rates and terms into a single loan. The result is a convenient single-payment plan. You can achieve consolidation in two ways: a direct consolidation loan for federal loans or a financing plan from a private lender.

Income-Driven Repayment Plans

If your federal student loans far exceed your income, an income-driven repayment plan is ideal for you. In most cases, student loans qualify for at least one of these solutions.

Find the Best Repayment Option for You

At Chipper App, we empower student borrowers to make the best financial decisions. With our experts on your side, you don’t have to guess which option is ideal for you.  Create your free account now to secure your financial future.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

See How Much You Can Save with Round-Ups

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