I don’t know how accurate any of this is one way or another, but I’m betting the effect of lowering the monthly payment by around $100 a month – a third of the average monthly payment- will have minimum impact of the persons finances. In fact, I wonder if after a few months it’s even noticed. Cynical old me😱
Unsecured debt — such as student, credit card or medical debt — is not backed by an asset the way a house backs a mortgage because lenders cannot repossess someone’s education if the individual fails to pay a student loan.
The $10,000 reduction in student debt would decrease the amount of total unsecured liabilities owed by 33.0% on average of those who have any student debt.
Hispanic individuals with a high school degree but no college degree (43.2%) and associate degrees (38.4%) are expected to experience among the greatest reduction in what they owed in unsecured loans.
Non-Hispanic individuals who are neither White nor Black with a high school degree, but no college degree (51.7%) and associate degrees (52.2%) are also expected to experience among the greatest reduction of unsecured amounts owed.
The $10,000 reduction in student loans is expected to have some of the smallest impacts on unsecured amounts owed by those with advanced degrees: between 17.5% and 24.2% in unsecured debt across race and ethnic groups.
Hispanic women (40.4%) are expected to experience among the largest shares of unsecured debt relief.