Rep. Alexandria Ocasio-Cortez (D-NY) this week took to Instagram Live and Twitter to explain how parent borrowers benefit from President Joe Biden’s student loan forgiveness.
Not only are student loans parents took out for their own college eligible for forgiveness, she pointed out, but also ParentPlus loans they took out for their children’s education.
The message comes as the online application for forgiveness is set to go live this month and underscores how student debt is not just a millennial problem. Baby boomers average $43,554 in higher education debt, according to a Credit Karma study, while Gen X owes $41,910 on average.
“Parents want to retire, but can’t due to ParentPlus loans and paying on their own loans as well,” Rep. Ayanna Pressley (D-MA) said Wednesday at a parent roundtable on student debt cancellation. “Student loan forgiveness is an intergenerational issue.”
Parent borrowers and advocates attended the roundtable hosted by the Student Debt Crisis Center (SDCC) to share stories of households struggling with managing finances due to the crippling effect of student loan debt.
“My daughter and I have had to be thrifty… I owe more now than I did when I took out the loans,” Kadijah Turay-Sengova, a law school graduate who owes more than $100,000, said at the roundtable. “Through the payment pause, I was able to realize what [this debt] meant to our lives. It’s a weight that you carry around that’s almost suffocating at times. [The cancellation] means that we are moving in the right direction. Again, grateful but hopeful for the capacity of more happening.”
The federal forbearance pandemic pause — enacted in 2020 and expiring December 31, 2022 — gave many borrowers, especially parents still paying off their own student loans along with ParentPlus loan debt, financial breathing room.
“This event is an important reminder that student debt is a multi-generational crisis that harms Americans of all ages,” Natalia Abrams, president and founder of SDCC, said. “Parents face some of the most difficult challenges — managing their student debt, taking out loans to pay for their children’s education, and doing all of this while supporting their family’s basic needs.”
In August, the Biden administration announced an executive order to forgive $10,000 in student loan debt for borrowers, along with an additional $10,000 in loan forgiveness for Pell Grant recipients.
More than 40 million borrowers are eligible for student debt relief.
Single borrowers who make less than $125,000 in adjusted gross income (AGI) and heads of household or married filing jointly borrowers who earn less than $250,000 in AGI are eligible for loan forgiveness.
“Millions of families across the country struggling to make ends meet are saddled with student debt that’s preventing them from supporting their families and investing in their futures. Too many parents are still working to pay off their own debt, while also taking on additional loans to help pay for their children’s education,” Allison Johnson of ParentsTogether said at the SDCC roundtable. “President Biden’s loan forgiveness plan is a vital first step in alleviating this crisis. From building a savings account for the first time to finally being able to purchase a home or starting a college fund for their own children, lifting the weight of student debt will help so many families.”
Ronda is a personal finance senior reporter for Yahoo Money and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda
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Source: https://finance.yahoo.com/news/student-loan-forgiveness-aoc-parent-borrowers-185550042.html