A new congressional proposal may represent a major departure from a plan for student loan forgiveness supported by progressive Democrats. Rep. Vincente Gonzalez (D-TX) introduced the Student Loan Relief Bill, which would cancel up to $25,000 of federal student loans for borrowers. Gonzalez introduced similar legislation in 2020 after the start of the Covid-19 pandemic. Progressive Democrats in Congress have been touting a plan from Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) to cancel up to $50,000 of student loans. This new proposal for $25,000 of student loan cancellation differs from Schumer and Warren’s plan for $50,000 of student loan cancellation. First, Gonzalez’s plan would cancel federal student loans starting with the balance with the highest interest rate. Second, this student loan cancellation plan doesn’t have income limits. In contrast, Schumer and Warren’s plan only applies to student loan borrowers with an income up to $125,000 of student loans. If you earn higher income, you wouldn’t qualify for any student loan forgiveness. However, this new proposal doesn’t have an income cap, meaning any income earner conceivably could get federal student loan cancellation.
Source: Forbes