Struggling to pay back your student loans? You’re not alone. Nearly 25% of the more than 41 million people with student loans are having trouble paying back their college debt, according to the Consumer Financial Protection Bureau (CFPB). For some, student loan forgiveness might be the answer.
Currently, student loans are the largest form of consumer debt in the United States after mortgages. The total amount of outstanding educational loans has exploded in the past decade, going from under $600 billion in 2006 to $1.2 trillion today. In 2016, the average graduate left school with $37,172 in student loan debt, according to Student Loan Hero. Although those loans might not be the drag on the economy and the housing market that some thought, at least some borrowers say they’re putting off major financial milestones in order to pay down their debt. About 30% of people under 30 with student loan debt said they’d put off buying a house or car, 19% had delayed getting married, and 14% had chosen to wait to have kids, a 2015 Bankrate survey found.
People have proposed various solutions to the student debt crisis, such as making it easier to take advantage of income-based repayment programs, lowering interest rates on existing federal student loans, and making it easier to discharge college debt in bankruptcy. But for some borrowers, a solution to the problem already exists. It’s called student loan forgiveness – free money to pay off your student loans. (Well, almost free; depending on the type of student loan forgiveness you receive, you may have to pay income tax on the balance paid on your behalf, though some people in Congress are working to change that.)