President Joe Biden announced Aug. 24 his intention to enact a student loan forgiveness plan, yet for many students, the amount he promised to forgive is but a small part of their debt.
The announcement comes after Biden’s March 2020 decision to suspend student loan payments due to the COVID-19 pandemic. Although the suspension period ends Dec. 31, many see loan forgiveness as the next step in Biden’s plan to help students who are struggling to pay their loans.
At its core, it is quite a simple policy. There is a blanket forgiveness amount of $10,000 for either single income households making less than $125,000 annually or double income households making less than $250,000 annually. Pell Grant recipients are the only borrowers who will be able to have $20,000 of loans forgiven.
This comes at a time when college tuition is at an all-time high, when many students leave college with debt, and billions of dollars are owed to the federal government. The average student owes nearly $30,000 in debt, and 34 million people use federal direct subsidized and unsubsidized loans, meaning either the federal government does or does not cover interest while people are in school.
Many Americans think Biden’s plan for student loan forgiveness is either a political stunt or the hopeful beginnings of a new government program. While there are many who will be helped by this new policy, there are others who either do not meet qualifications or the amount being forgiven is negligible to their overall debt. As with anything in the American political sphere, there are supporters and detractors, yet the students and workers who are the targets of this new policy are only hoping to be helped.
Sean Reilly, a senior human resource management major, said the amount may not be significant, but is still helpful. He is not stressed about paying off his loans, as many students have a carefree attitude about their debt — they trust themselves and their futures.
“I’m not stressed now, now’s not the time to be stressed,” Reilly said. “If there comes a time when I’m not making the money I need to be, yeah, I might be stressed then. But I’m not worried about that.”
Ny Miller, a senior studying sociology, said she really has not thought about how her loans would affect her economically. She has always told herself her loans would be paid, and that she would live comfortably while doing so, no matter what.
John Kennedy, a fourth-year architecture student, has been paying for his tuition working part-time jobs and using the GI Bill, which helps veterans and their families pay for college. However, the money from the GI Bill ran out last year, and he has been paying out of pocket since. Kennedy plans to take out loans next year when his savings run out, he said.
“I don’t think I’m going to be eligible to have my loans forgiven considering the cut-off is the end of next year,” Kennedy said. “I don’t understand why they would do this for only one year unless there were political motivations. I understand there are people that will be helped by this, but only some, and even they will only receive momentary relief.”
There is a certain crushing reality in being too late or being too quick on the draw. While loan forgiveness may be a political move on behalf of the Biden administration, it does not take away from the fact that there are people being helped. There are also valid questions to be raised about the policy and its effects.
Although to some it may seem a small gesture rather than a real lifesaver, others, such as Miller, think differently.
“I’ve taken out about $27,000 in student loans, and it probably would’ve taken me 10 years to pay off my loans at the rate I was going to go,” Miller said. “A lot of people are suffering in debt due to student loans and I know this will make life easier for them not having to worry about someone garnishing their paycheck if you don’t pay.”
Although there are people who have paid their debt, there are many who cannot and struggle to overcome their circumstances. Miller thinks “equity over equality,” is a better method of socio-economic mobility.
Ben Hepler graduated from the UofA in 2019 and immediately went to law school at the University of Colorado, taking out the maximum amount available for subsidized federal student loans. If Hepler had not attended law school, his debt would have been completely eradicated, but because he took on more debt, the forgiveness plan is just “a drop in the bucket,” he said.
Hepler thinks there should be better plans in place to help students lessen their debt, he said.
“$10,000 is $10,000, so I’m sure it’s helping some people, but I really think there needs to be a better long-term plan in place like reducing the interest rates on student loans, or at least ending the unsubsidized loans that gain interest while you’re still in school,” Hepler said. “I think this is only going to help people with undergrad debt, I don’t think it’s targeted towards graduate students with large amounts of debt.”