The Biden administration announced on Friday an additional round of student loan forgiveness, this time impacting public service workers. Almost 55,000 borrowers will be impacted by the decision, which will have a cost of $4.28 billion. They include teachers, firefighters and members of law enforcement who meet certain qualifications.
Public service workers were able to apply for forgiveness after making payments on their federal loan balance for 10 years. The PSLF Program provides an incentive for Americans to pursue and remain in careers in education, public health, law enforcement, emergency response, and other critical public service fields by forgiving borrowers' remaining student loan balance after they have made the required 120 qualifying monthly payments," reads a passage of the announcement.
The latest round of forgiveness takes the total amount to nearly $180 billion throughout the Biden administration and has impacted some 4.9 million borrowers. The statement also highlighted the administration approved over $28 billion for borrowers who were "cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements," and over $16.2 billion for over half a million borrowers with a permanent disability.
About seven in ten of all currently enrolled college students or previously enrolled students who stopped out of their program before completing it say they have delayed at least one major life event because of their student loans, according to a new Gallup study from this year.
Titled "Most Student Loan Borrowers Have Delayed Major Life Events," the survey shows that about 71% of students revealed the effects that taking student loan has had on their lives.
The survey was conducted from October through mid November, and it gathered responses from over 14,000 current and prospective college students. This includes 6,015 students enrolled in a post-high school education program (certificate, associate or bachelor's degree), 5,012 adults not currently enrolled with some college but not degree, and 3,005 adults who have never been enrolled in a postsecondary school or program.
The most common among these responses is purchasing a home, named by 29% of borrowers, followed closely by buying a car (28%), moving out of their parents' home (22%) and starting their own business (20%). Moreover, 15% of these borrowers also report they have delayed having children because of this type of loan.
According to the study, even modest amounts of student loans impact major life events.
In fact, more than nine in 10 of those who borrowed at least $60,000 in student loans say they have delayed one or more of these major milestones because of student loans. However, even those who borrowed less than $10,000 in student loans (63% in this category) gave the same answer.
Latinos tend to take longer to graduate college, often because they're balancing school with work, CNBC reported. Financial stress and caregiving burdens lead to half of Hispanic students saying it is "very difficult" or "difficult" for them to remain in their post-secondary education program, according to another Gallup study from last year.
Similarly, loan defaults (stopping loan repayments) tend to exacerbate long-standing wage, wealth and opportunity gaps. Around 29% of white borrowers on their deferral student loans compared to 40% of Hispanic borrowers and 50% of Black borrowers, according to The Pew Charitable Trusts.
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