The government’s response to the pandemic could accelerate the trend for companies to offer student loans as a perk.
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When you combine the rapid social and economic changes brought about by the Covid-19 pandemic with a new government in Biden and a shift in the balance of power between the parties in Washington, several aspects of our financial lives are likely to be affected – including the cost of education . Here are the ways education costs can change in 2021 – for better or worse: From potential student loan awards to more educational opportunities and tuition freeze:
tuition fee
Four-year tuition fees for public universities rose by just 1.1% in the 2020-2021 school year – for the first time in decades, the increase failed to outperform the rate of inflation. The 2.1% increase in private four-year tuition fees was also among the lowest since 1990.
“This year’s data underscores the profound impact Covid-19 has had on higher education,” Jessica Howell, vice president of research on the college board, said in a statement.
In fact, tuition freezes are becoming more common at many universities while others offer online tuition at discounted prices. This pattern is expected to continue through 2021.
“Several colleges have announced either a tuition freeze or a reduction in tuition fees for the fall semester 2021 to encourage those who may face financial difficulties due to Covid to continue enrolling and / or continuing their path to higher education. The Motivation Behind It When you cut tuition fees or offer a tuition freeze, you need to build your student body to reduce the loss of higher income, “said Lauren Maxwell, vice president, Trustco Bank.
Switching to online learning can have more lasting effects. More universities are offering online or hybrid options at a lower price than traditional in-person tuition. This can lead to a breakdown of cost structures over the long term and provide students with a greater variety of educational opportunities, including greater flexibility in terms of geographic and work schedules. Over time, this can reduce reliance on student loans to some extent.
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Student Loans
The Biden government announced its support for a $ 10,000 student loan allocation plan and on Wednesday extended the federal student loan payment hiatus until at least September 2021. This measure extended the deadline for the currently applicable repayment moratorium on January 31. This means that borrowers of federal federal loans can expect sustained reparations for collecting interest and payments in addition to the possible forgiveness of the loan. However, these only apply to federal student borrowers, so private borrowers need to consult their lenders about any loan changes or loan flexibilities.
“While Congress ultimately left student loan forgiveness out of the recent stimulus package, the new administration has announced that they are re-examining the issue and wanting to cancel $ 10,000 in student loan debt immediately. Meanwhile, student loan payments on federal loans will have been suspended until September 2021 with no further extensions made. Those who have been economically affected by Covid should consider any options they might have with their lender, including income-related repayment plans or refinancing their student loan debt at a lower interest rate, “Maxwell says.
Other issues likely to be addressed this year are the simplification of income-sensitive repayment plans. a solution to the “tax bomb” phenomenon where all credit is taxed as income and better access to the public credit program is granted.
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