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Biden’s student loan forgiveness plan prompts mixed responses from students

Biden’s student loan forgiveness plan prompts mixed responses from students

Biden’s student loan forgiveness plan prompts mixed responses from students
September 08
10:00 2022

President Joe Biden recently announced a new plan that will erase $10,000 of debt for millions of federal student loan borrowers. 

About 43 million Americans have some kind of student loan debt, and 70 percent of students who receive a Bachelor’s degree have education debt by the time they graduate. The current estimate for total student loan debt puts it at $1.6 trillion. Biden’s decision is estimated to cost around $400 billion if policymakers choose to make up the difference with spending cuts, tax raises or borrowing, according to CNBC.

Individuals who are single and earn under $125,000 and households earning under $250,000 will qualify for the $10,000 of debt cancellation. Individuals who have received Pell Grants are eligible for an additional $10,000. 

After months of anticipation as the White House hinted at forgiving student loans, the final decision released on Aug. 24 was met with mixed opinions. For some students with debt, the decision has lifted a weight off their shoulders.

Amber Bryant graduated with her bachelor’s degree from UNT in May. She is a mother of two and has been going to school on and off for the past 10 years, relying on Pell Grants and student loans for tuition. 

“Every decision I made was impacted by cost and potential debt, and every class that needed to be retaken was met with extreme guilt because that’s more loans and more tuition,” Bryant said. “This forgiveness will cut my debt in half.”

Student loan forgiveness was a cornerstone of Biden’s 2020 presidential campaign. He pledged to cancel a minimum of $10,000 of student debt per person but some expressed disappointment that he isn’t canceling more.

“I’m thankful for the forgiveness,” Bryant said. “[But] it’s not what we voted for. We, everyday American people, need this help. And we need more help like this.”

The plan will also phase out a pause on federal student loans which began at the start of the COVID-19 pandemic. The pause has been extended once more, with payments resuming in January 2023. 

One of the factors that led to this decision is the long history of increasing tuition prices at universities, and a steady process of moving the burden of student loans from taxpayers to borrowers has occurred. Tuition stayed artificially low for a period of time due to a tuition cap according to The Dallas Morning News. However, when that was lifted, the cost of attending college spiked — partially due to states continually cutting higher education funding over the last decade. 

The cost of tuition for non-Texas residents at UNT in 1990 was $122 per semester hour, $276 when adjusted for inflation. Today, the cost listed on UNT’s website is $458 per credit hour for non-residents. Over time, the cost of attendance at UNT and universities across the country has steadily increased. 

Opponents of Biden’s plan believe that canceling debt is unfair to those who have already worked to pay off their debts or did not attend college. Others believe student loan forgiveness may negatively impact the economy. 

Jose Negrete, a computer science post-baccalaureate student, said he benefits from the forgiveness but sees both sides of the argument.

“The past few months have been difficult to watch with the amount of government spending,” Negrete said. “Americans have watched their housing market, gas prices and general inflation double, while Biden loans Ukraine billions of dollars while also forgiving billions in student debt. It’s a difficult perspective to spin.”

Financial planning sophomore Nia Gilmore has a similar opinion and thinks the student loan crisis should have been handled differently. 

“I think that the program had more potential if they had looked more long-term,” Gilmore said. “For example, continuing the zero percent interest on the student loans. That way the people who did pay their loans off early aren’t being put at a disadvantage. The folks who didn’t go to college aren’t upset that their taxes are going to other people’s education.”

Some economists say Biden’s student debt relief plan will not greatly impact inflation but estimates from the National Taxpayers Union suggest that the plan could result in a $2,500 burden per taxpayer. 

More information is expected to be released soon regarding receiving forgiveness on loans. Around 8 million Americans could have their debt forgiven automatically. Applications will open before the pause on student loan repayments expires, according to the White House.

Featured Image: Groups of students walk through the union on the first day of classes on Aug. 29, 2022. Photo by John Anderson

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Jillian Nachtigal

Jillian Nachtigal

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