More than 40 million Americans could see their student loan debt reduced — and in many cases eliminated — under the long-awaited forgiveness plan President Joe Biden announced Wednesday, a historic but politically divisive move in the run-up to the midterm elections. Fulfilling a campaign promise, Biden is erasing $10,000 in federal student loan debt for those with incomes below $125,000 a year, or households that earn less than $250,000. He’s canceling an additional $10,000 for those who received federal Pell Grants to attend college. It’s seen as an unprecedented attempt to stem the tide of America’s rapidly rising student debt, but it doesn’t address the broader issue — the high cost of college. Republicans quickly denounced the plan as an insult to Americans who have repaid their debt and to those who didn’t attend college. Critics across the political spectrum also questioned whether Biden has authority for the move, and legal challenges are virtually certain. Biden also extended a pause on federal student loan payments for what he called the “final time.” The pause is now set to run through the end of the year, with repayments to restart in January. “Both of these targeted actions are for families who need it the most: working and middle class people hit especially hard during the pandemic,” Biden said at the White House Wednesday afternoon. The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans. Current college students qualify if their loans were issued before July 1. For dependent students, their parents’ household income must be below $250,000. Most people will need to apply for the relief. The Education Department has income data for a small share of borrowers, but the vast majority will need to prove their incomes through an application process. Officials said applications will be available before the end of the year. Biden’s plan makes 43 million borrowers eligible for some debt forgiveness, with 20 million who could get their debt erased entirely, according to the administration. About 60% of borrowers are recipients of federal Pell Grants, which are reserved for undergraduates with the most significant financial need, meaning more than half can get $20,000 in relief. Sabrina Cartan, a 29-year-old media strategist in New York City, is expecting her federal debt to get wiped out entirely. When she checked the balance Wednesday, it was $9,940. Cartan used the loans to attend Tufts University, and with Biden’s plan she will be able to help her parents repay the additional thousands they borrowed for her education. As a first-generation college student, she called it a “leveling moment.” “I know there are people who feel that this isn’t enough, and that is true for a lot of people,” said Cartan, who already has repaid about $10,000 of her loans. “I can say for me personally and for a lot of people, that is a lot of money.” For Braxton Simpson, Biden’s plan is a great first step, but it’s not enough. The 23-year-old MBA student at North Carolina Central University has more than $40,000 in student loans. As an undergraduate student she took jobs to minimize her debt, but at $10,000 a semester, the costs piled up. Also read: One year after Afghan war, Biden struggles to find footing As a Black woman, she felt higher education was a requirement to obtain a more stable financial future, even if that meant taking on large amounts of debt, she said. “In order for us to get out of a lot of the situations that have been systemically a part of our lives, we have to go to school,” Simpson said. “And so we end up in debt.” The plan doesn’t apply to future college students, but Biden is proposing a separate rule that would reduce monthly payments on federal student debt. The proposal would create a new payment plan requiring borrowers to pay no more than 5% of their earnings, down from 10% in similar existing plans. It would forgive any remaining balance after 10 years, down from 20 years now. It would also raise the floor for repayments, meaning no one earning less than 225% of the federal poverty level would need to make monthly payments. As a regulation, it would not require congressional approval. But it can take more than a year to finalize. Biden’s plan comes after more than a year of deliberation, with the president facing strong lobbying from liberals who wanted sweeping debt forgiveness, and from moderates and conservatives who questioned its basic fairness. Once a popular campaign promise during the presidential primary, the issue created an almost unwinnable situation. Some fellow Democrats criticized the plan Wednesday, saying it’s too costly and does little to solve the debt crisis. “In my view, the administration should have further targeted the relief, and proposed a way to pay for this plan,” said Sen. Michael Bennet, D-Colo. “While immediate relief to families is important, one-time debt cancellation does not solve the underlying problem.” Still, many Democrats rallied around it, including support from those who wanted Biden to go beyond $10,000. “I will keep pushing for more because I think it’s the right thing to do,” said Sen. Elizabeth Warren, D-Mass., who had urged Biden to forgive up to $50,000 a person. “But we need to take a deep breath here and recognize what it means for the president of the United States to touch so many hard-working middle class families so directly.” Proponents see cancellation as a matter of racial justice. Black students are more likely to take out federal student loans and at higher amounts than their white peers. The NAACP, which pressed Biden to cancel at least $50,000 per person, said the plan is “one step closer” to lifting the burden of student debt. Derrick Johnson, the group’s president, urged Biden to cancel the debt quickly and without bureaucratic hurdles for borrowers. Biden’s decision to impose an income cap goes against objections from some who say adding the detailed application process to verify incomes could deter some borrowers who need help the most. The Biden administration defended the cap as a gate against wealthier borrowers. Politically, it’s designed to counter arguments from critics who call debt cancellation a handout for the wealthy. Republicans hit hard with that argument on Wednesday despite the cap. “President Biden’s inflation is crushing working families, and his answer is to give away even more government money to elites with higher salaries,” Senate GOP leader Mitch McConnell said. “Democrats are literally using working Americans’ money to try to buy themselves some enthusiasm from their political base.” One of the chief political sticking points has been the cost: Biden’s new plan, including debt cancellation, a new repayment plan and the payment freeze, will cost between $400 billion to $600 billion, according to the Committee for a Responsible Federal Budget, a nonprofit that advocates for lower deficits. Asked about the cost Wednesday, Susan Rice, Biden’s domestic policy adviser, said, “I can’t give you that off the top of my head.” There are also lingering questions about the administration’s authority to cancel student loan debt. The Justice Department released a legal opinion concluding that the Higher Education Relief Opportunities for Students Act gives the Education secretary the “authority to reduce or eliminate the obligation to repay the principal balance of federal student loan debt.” The legal opinion also concluded that the forgiveness could be applied on a “class-wide” basis in response to the coronavirus pandemic, a national emergency.. Lawsuits are likely nonetheless. The Job Creators Network, which promotes conservative economic policies, said it was considering legal options, with president and CEO Alfredo Ortiz calling the president’s effort “fundamentally unfair” to those who never took out loans for college.
Many aspiring students of Bangladesh dreams of a better higher education opportunity. The reputed public Universities of Bangladesh can accommodate a limited number of new students every year. As the scope of international quality higher education is limited in Bangladesh, many students want to study abroad. Besides, some private universities of Bangladesh are also providing world-class education. However, the cost of studying abroad or in private institutions is out of reach for many. Education loans can be a great option for them. Let's take a deeper look into the student loan schemes of Bangladesh and what you should consider before opting for one. What is an Education Loan? Education loan or student loan works similarly like other loans. Depending on banks, you can get about 5 Lac to 20 Lac BDT in loans for your higher studies. Most banks offer a competitive interest rate on the loans which makes it easier to pay back once you settle down. Education loans are a flexible and easy loan scheme that is offered by almost all the leading private, including some government banks of Bangladesh. In Bangladesh, a good number of students fail to complete the higher education cycle due to a lack of funds. In that regard, student loans can act as a financial net for the students to complete their education and create a career for themselves. Read Best Car Loans in Bangladesh to Grab Your Dream Car Things to Consider Before Getting a Student Loan Eligibility for Loan Every bank has a stipulated requirement for loans. The eligibility criteria are listed on the respective websites of each bank. Every bank has a minimum parental income requirement or security deposit. These minimum criteria grossly differ from bank to bank. The eligibility criteria will help you to deduce which scheme will work best for you. Interest Rate and Repay Period Another factor to consider is the interest rate and the repayment period of the loan. The interest rate differs from bank to bank and so does the repayment period. It generally hovers between 9% to 12%. The repayment tenure goes as high as 60 months. Based on your needs and ability, you can easily choose the best possible option for yourself. Understand the Terms and Conditions Well It's important to read the terms and conditions well before signing up for a loan scheme. There might be charges and rules that aren’t explicitly mentioned in the brief. So, it's important to be well informed about everything beforehand. Read: The Emerging Logistics Tech Startups, Courier, Delivery Services in Bangladesh Calculate Your EMI Regardless of the duration of the repayment, you need to have a clear idea about the monthly EMI of your loan. It is granted that you won't have the means to pay a hefty premium monthly. Choose a repayment duration based on your ability to coincide with the EMI. Best Banks for Education Loans in Bangladesh Mercantile Bank Student Loan Mercantile Bank was established in 1999 as one of the premier private banks of the country. The bank operates with a range of services in different sectors and industries of Bangladesh. The company started providing student loans in 2016 to eligible candidates. The loan limit to study in Bangladesh is 5 Lac and for abroad, it's 20 Lac. The loan is issued for students who have completed their HSC or equivalent degree. The interest rate is 9% per annum which is added every year. The repayment tenure is 12 to 72 months. You are eligible to use the money for admission fees and accommodation. In addition to that, all expenses related to the completion of the degree are covered within the scope of the loan. You can learn more about the student loan scheme of Mercantile bank from here. Read Best Home Loans in Bangladesh to Build Your Dream Nest One Bank Student Loan One bank was founded in 1999. Since its inception, One bank has been a key player in the private banking sector of Bangladesh. This bank also offers an education loan scheme. However, there are certain differences. The One bank education loan isn’t allocated to the student. Rather a parent or an eligible guardian has to apply for the loan on behalf of the student. The minimum eligibility for a salaried guardian is 25000 BDT to 50000 BDT monthly income depending on the profession of the guardian. The loan ranges from 50000 BDT to 20 Lac BDT depending on the need of the student. The interest rate is set at 9% per annum. You will be given up to 60 months tenure to repay the loan. The loan is applicable for usage in education-related purposes both at home and abroad. However, the minimum salary cap for the guardian is an added constraint for many aspiring students with financial needs. To learn more about the loan and its criteria, you can refer here. Read Mobile Insurance Offers in Bangladesh Can Save Lives
University Grant Commission (UGC) has decided to provide interest free loans to 41,501 insolvent students of public universities for buying smartphone to ensure their participation in online education programmes amid the Covid-19 pandemic.