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There’s a Better Solution for Student Loans Than Forgiving Debt, Experts Say

Cutting interest rates to 0% would help borrowers as President Biden ponders $10,000 in debt forgiveness.

RF student college
Photographer: Klaus Vedfelt/Digital Vision/Getty Images

President Joe Biden is considering forgiving $10,000 in student loans per borrower, but eliminating interest on the debt could be a more effective way to reduce the financial burden, according to experts.

The impact of 0% interest has been apparent amid the pandemic freeze on student loan repayments, which is scheduled to end on Aug. 31. With interest eliminated, borrowers saved $37.8 billion through the end of the last year. And in the first quarter of 2022, the total national student loan debt increased just 1.95%, the lowest rate in at least two decades, according to the Education Data Initiative.