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The Biden administration announced Student loan forgiveness plan This will be a huge relief for millions of borrowers.
Working and middle-class Americans can have up to $10,000 in federal student loan forgiveness, and Pell Grant recipients can have up to $20,000 of student debt written off within their designated income limits.
In the year By 2022, the amount of student loan debt in the U.S. will be close to $1.75 trillion. Federal Reserve Board of Governors. About 43 million borrowers owe an average of more than $37,000 in federal student loan debt. Educational Information Initiative Reports.
Countless students who have taken out loans for college have been told that the investment will pay off in the long run, hoping for a better future, said Erica Rasur, a financial therapist and founder of the Institute. Crypto god.
“A lot of borrowers think they’ve basically been billed for goods,” Resour says, “and you’re not only guilty of defaulting, it’s embarrassing.”
On the other hand, canceling student loans has the opposite effect and allows graduates to pursue dreams and careers that mountains of debt would never allow.
“When you have this big bar hanging over your head, it really obscures the things you thought you could do with your degree,” Resur says. “I think to be honest with you, student loans were a soul-crushing dream.”
Here are three ways student loan forgiveness can improve the mental health of borrowers.
How student loan forgiveness can improve mental health
- It can give you a sense of freedom. With less debt hanging over your head, you’re more likely to pursue opportunities you might not have thought of before, Rasur says. She believes loan forgiveness can encourage people to dream again and not limit themselves.
“I’ve seen firsthand how freedom comes from that, what positivity comes from that freedom,” Resur says, “and how people change the way they look not only at themselves, but at how they work in this world.”
Less debt to pay off can mean more money for yourself. And having more money gives you the opportunity to buy a house, buy a better car or do other things you didn’t think were in your budget, Rasure adds.
- You don’t feel forced to make a career decision based on income. Often when considering a job, people calculate how much money they’ll need to pay off college loans, Rasur says. But if the debt was gone, most people would be able to focus on doing things they enjoy.
Rasur testified how the loan forgiveness had a positive impact on her mother-in-law, who was able to consider unique opportunities in her field after she was freed from $300,000 in debt. Her brother’s wife, a public defender, relied on student loans to get her law degree and after 10 years of public service, her loan was written off.
For others, the freedom that comes with debt relief means working in a low-income community, as a doctor, teacher, or other service-oriented profession that typically comes with low wages.
“We can pursue opportunities that don’t pay as much, but can have a greater social impact in the world,” Resour says.
- Additional money can be allocated for retirement. You can put money into a retirement plan that you can use toward your loan payments to prepare for the later years of your life, Rasure notes.
This will make it easier not only on yourself but also on your children who will be responsible for how to take care of you. In addition, many parents have taken out loans for their children’s schooling and are struggling to pay off the debt.
“Obviously, parents, in most cases, really love their kids, they want the best, and they’ll make all the sacrifices,” Rasur says, “but parents are at or near retirement age and they’re still paying off student loans.”
Overall, Rasure predicts that student loan forgiveness will have a positive effect on mental health.
“Expanded student loan forgiveness helps society at a cellular level, which means it helps employers, employees, family relationships and the economy.”
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