ORLANDO, Fla. – Roughly 57,000 Florida residents paying student loans for decades are on track to walk away from those loans, provided they have been paying on time for 20 or 25 years, according to the Department of Education.
The discharges were announced via email on Friday, July 14, to an estimated 800,000 Americans.
Under Secretary of Education James Kvaal told News 6 the loan forgiveness is something that they have earned because, “they have been paying all they can afford for decades.”
“We’re keeping a promise that we made to them long ago that we would forgive those loans,” Kvall said. “The amount you pay every month is set on a sliding scale based upon your earnings.”
Kvaal told News 6 the Department of Education found “about 800,000 people” who have been making those payments and should have had the loans forgiven, but it was “stalled” because the paperwork had not been processed.
As to the cost to American taxpayers, Kvaal called the $39 billion dollar loan forgiveness plan an investment “in a stronger economy.”
“Student debt is much larger than it has ever been before,” Kvaal said. “It’s a factor for young people trying to buy a house, start a family, start a business.”
However, critics say that programs like student debt forgiveness could increase the amount of debt held by the federal government, potentially exacerbating issues with inflation. Economists also point to systemic issues with governments financing universities as a major cause behind growing tuition rates, which would be further aggravated by these sorts of policies.
According to the Department of Education website, “historical failures” in the administration of the federal student loan program show payments were not accurately accounted for.
A department spokesman told News 6 that “due to the American Rescue Plan Act of 2021, the balance of loans that are forgiven is not considered taxable income for federal income tax purposes.”
Kvaal said the program has generated email messages from imposters trying to cash in by implying they represent the Department of Education.
“We’re seeing people offering to help people with their student loans for a fee,” Kvaal told News 6. “We’re never going to charge people for help.”
The legitimate email addresses and a link for loan information are included on the official email, including email@example.com, firstname.lastname@example.org or email@example.com.
You can report scam attempts to the Federal Trade Commission by calling 1-877-382-4357 or by visiting ftc.gov.
If you have an investment or consumer issue, email firstname.lastname@example.org or text the words “make ends meet” along with your issue and email to 407-676-7428.
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