Current student loan news for the week of May 31, 2021

In the ever-changing world of student loans, it is essential to stay abreast of current events and student loan rates. Below are this week’s student loan trends that could affect your loans – and your wallet.

2 current trends in student loans for the week of May 31, 2021

1. Wilberforce University Cancels Institutional Student Loan Debt for Classes of 2020 and 2021

Wilberforce University announced on Saturday that it will write off all student loan debts owed to the university by 2020 and 2021 graduates. The forgiven amount – totaling more than $ 375,000 – was made possible through institutional funding and outside programs such as the United Negro College Fund (UNCF).

How it affects student loans

Wilberforce University is the second historically black university or college (HBCU) in recent weeks to write off graduate student loan debt; in early May, Delaware State University forgave more than $ 730,000. In either case, students will have their institutional debt canceled, although they are still responsible for repaying loans from the federal government and private lenders.

In response to HBCU funding disparities, President Biden also proposed increased financial support for HBCUs, Tribal Colleges and Universities (TCUs), and Minority Serving Institutions (MSI) in his annual budget proposal. The discretionary funding allocated to these universities will be used to make college education more affordable for these students.

2. Michigan Lawmakers Propose New Bill To Exempt Federal Student Loan Exemption From State Income Tax

Michigan lawmakers proposed a new bill this would make the federal student loan remission free of state income tax. The new bill, led by Representative Sarah Anthony, has been supported by more than a dozen Democratic lawmakers.

How it affects student loans

Earlier this year, Biden put in place legislation that makes the cancellation of federal student loans exempt from federal income tax until 2025, but any amount canceled is still subject to income tax. state revenue. If this bill passed, Michigan residents would not have to pay federal or state income tax on their canceled balances, potentially saving borrowers thousands of dollars.

Next steps

Whether you’re new to the area of ​​student loans or already in advanced repayment, it’s wise to stay on top of how your student loan rates might change. As 2021 continues, more opportunities for cheaper loans or loan cancellations may open up; Keep an eye on the Bankrate student loan news center for the latest trends.

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