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How Trump, Democrats could affect college debt

This story is the third in a series that looks at how the presidential candidates could shape your family’s finances.

Outstanding student loan debt in the U.S. currently stands at $1.6 trillion, a burden that stands in the way of many Americans buying a home, building up savings or planning for retirement.

Currently, income-driven repayment plans allow borrowers to put off making payments on federal loans if they’re unemployed or earn less than 150% of the federal poverty line. That amounts to $18,735 for a single person and $24,360 for a family of two. After a period of years, remaining balances are also forgiven.

But some of the candidates vying for the presidency say they want to wipe away debt immediately for some borrowers.

Sen. Elizabeth Warren of Massachusetts would cancel student loan debt totaling $50,000 for every borrower whose household earns less than $100,000.

Those with higher incomes would also get some relief. For instance, a household earning $160,000 could have $30,000 in student loan debt forgiven. Those earning more than $250,000, however, wouldn’t get a similar break.

Understanding student loan documents and financial aid award letters can be one of the biggest hurdles in financing a higher education.

Buttigieg aims to protect borrowers of student debt 

Pete Buttigieg, former mayor of South Bend, Indiana, says students who participated in expensive, for-profit educational programs will have their debts erased. And collection agencies will no longer be able to garnish the wages of lower-income borrowers who have defaulted on their college-related debt.

Sen. Bernie Sanders of Vermont promises to cancel the student loan debt of the roughly 45 million people who collectively owe about $1.6 trillion and to limit interest rates on future student loans to no more than 1.88%.

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