Local college students mixed on Biden’s student loan forgiveness plan
Published 1:30 pm Saturday, August 27, 2022
On Wednesday, President Joe Biden unveiled a three-part plan to help students navigate their student loan debt and provide working families with relief as they continue to recover from the hardships associated with the COVID-19 pandemic.
Biden’s plan offers debt relief in an effort to address the burden of growing college costs and make the student loan system more manageable for working families and students.
Students in Dr. John Tures’ American Constitutional Law class at LaGrange College had a lot to say about the Student Loan Forgiveness Plan.
“I think it’s helpful. Especially when student debt hard to pay off,” said Jacob Jeffords, a student in Tures’ class. “After graduation, interests just keep stacking up. I think it gives lot of people hope with debt relief.”
Student Hannah Godfrey said, “I feel like we’re going to see a lot of effects on mental health. A lot of students struggle with the pressure of having to pay student loans back, however, I do think at the same time it’s a very temporary solution to a problem when college is expensive all over the nation.”
According official White House documents, part one of Biden’s plan is to extend the current student loan repayment pause final time through Dec. 31, 2022, with payments set to resume in January 2023. The original pause was started by former president Donald Trump in March of 2020. Due to economic hardships brought on by the pandemic, the student loan repayment pause has since been extended six times.
Karson Troth said, that while Biden’s plan is helpful, it feels like a reactive fix, rather than being proactive and fixing the actual issue of the $1.75 trillion in student loan debt nationwide.
Part two of Biden’s plan aims to provide debt relief to low- and middle-income families.
According to the document, to help borrowers at the highest risk of delinquencies or default transition back to repayment, the U.S. Department of Education will cancel $20,000 in debt to Pell Grant recipients and cancel $10,000 in debt to non-Pell Grant recipients.
As stated in the document, borrowers who are eligible for this relief have income less than $125,000 or less than $250,000 for married couples or heads of households.
Borrowers who are employed by non-profits, the military, or federal, state, tribal, or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program.
Part three of Biden’s plan aims to make the student loan system more manageable for current and future borrowers. According to the document, the plan proposes a rule to create a new income-driven repayment plan that will reduce future monthly payments for lower- and middle-income borrowers.
Per the document, the new rule would require borrowers to pay no more than 5% of their discretionary monthly income on undergraduate loans. This is lower than the 10% required by the current income-driven repayment plan.
In this part of Biden’s plan, the income that is considered non-discretionary is protected from repayment, guaranteeing that no borrower earning under the federal poverty level — borrowers that earn roughly about $15 minimum wage — will have to make a monthly payment.
This rule will also forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less. This includes covering the borrower’s unpaid monthly interest, unlike other existing income-driven repayment plans. no borrower’s loan balance will grow as long as they make their monthly payments.
For more information of Biden’s Student Loan Forgiveness plan, visit https://studentaid.gov/ or https://www.whitehouse.gov/ .