The Biden Administration’s student loan forgiveness program could have a beneficial ripple effect on people having trouble making payments on other debts, such as auto loans, the CFPB said in a new research brief.
“That is, many of the student loan borrowers who are currently struggling with repayment on other debts might no longer have student loan debt to repay when the payment suspension ends,” the bureau stated.
The administration has announced a plan to provide up to $20,000 in debt relief for many students who also received Pell Grants and who earn less than $125,000 individually or $250,000 for households. The plan would further provide up to $10,000 in debt relief for other borrowers with federal student loans.
The program is on hold since several lawsuits have been filed against the administration challenging the initiative.
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