By Maria Odenbaugh
President Joe Biden announced a student loan relief plan for middle-class borrowers Aug. 24, taking steps toward one of his more high-profile, big-shot campaign promises. Constituents are still asking the question, will he follow through on it?
The plan aims to provide breathing room for families who have undoubtedly felt the weight of student loans on their shoulders.
Biden and the Department of Education plan to provide debt relief to address the financial impacts of the pandemic. The three-step plan will make student loan repayment an achievable goal and protect future students from ever increasing education costs.
The initiative sounds promising to borrowers because the end goal is to help them save for the future and make college affordable, but how will they do it?
They plan on providing $20,000 debt cancellation to Pell Grant recipients and up to $10,000 cancellation to non-Pell Grant recipients. However, this only applies to Pell Grant recipients whose individual income falls under $125,000, double the amount for married couples. High-income borrowers will not benefit from this.
The Department of Education intends to make student loans easily accessible by decreasing monthly payments through low-income driven payment plans based on the percentage of discretionary income, the total money remaining after paying necessary expenses.
They have also proposed cutting the monthly payments in half for undergraduate loans, raising the amount of income that is considered non-discretionary income, forgiving loans after 10 years of payments and covering the unpaid interest rates of borrowers.
Earning a degree in America should be a cost-free gateway to achieving this goal but student loans and constantly increasing tuition costs keep working class Americans from doing so.
Getting an education has gotten too expensive.
Is a college degree necessary or sufficient for success?
Through these reforms students could potentially embark on a life full of opportunities instead of a life full of debts.
How is it possible that in one of the richest countries in the world, has over 48 million Americans who carry $1.75 trillion dollars of student debt when they are just trying to progress their lives?
United States Secretary of Education Miguel Cardona, stated perfectly that the government promised to restore trust in a system that should be “creating opportunity and not a debt trap.”
“Today, we’re delivering targeted relief that will help ensure borrowers are not placed in a worse position financially because of the pandemic,” Cardona said.
Although this plan is reachable, those opposing debt cancellation argue that the U.S. economy is strong and most debts are paid off. However, according to U.S. Student Loan Hero, 48 million Americans owe nearly $1.75 trillion in student debts.
As Biden and The Department of Education show their support to the students and borrowers of the nation, they give hope and promise that the idea of being able to save and eventually be debt free is in the future.
Americans should have the opportunity to live debt free and this plan is a step in the right direction.