By Rocio Hernandez
Questions are still swirling more than three weeks after the Biden administration announced plans to provide relief for low- to middle income college graduates — and possibly some parents — by forgiving up to $20,000 in student loan debt per borrower.
The White House couched it as a move to help up to 43 million borrowers, and that may even cancel the full remaining balance for almost half of those borrowers.
The plan has been met with mixed reactions.
For Sparks resident Justin Bouldt – who owed $38,000 in student loan debt after graduating from UNR in 2015 – it’s life changing. He had whittled his balance to $14,000 before the announcement was made. Bouldt qualifies for $10,000 in loan forgiveness, and says he has enough money in savings to pay the remaining $4,000.
“(I’m) finally going to be able to buy a second car, and the wife and I won’t have to carpool to work,” he said.
But it’s a drop in the bucket for other borrowers like Lena (who didn’t feel comfortable sharing her full name), who has $125,000 in student loan debt after earning bachelor’s and master’s degrees from the University of Phoenix. The maximum aid she qualifies for is also $10,000.
“(Ten) grand is great, but it doesn’t put a dent in my loans,” she said.
Some Republican lawmakers have scoffed at the plan, saying taxpayers who never took out a student loan shouldn’t have to foot the bill for borrowers, and some are even threatening to bring a legal challenge to block Biden’s plan.
Others say the plan doesn’t go far enough to address the country’s student loan debt crisis or rising costs of a higher education that has made college unattainable for some Americans. Student loan debt in the U.S. totals nearly $1.75 trillion, according to a July report from the Education Data Initiative. The organization estimates that the average annual cost of tuition at a public four-year college is 37 times higher than tuition in 1963.
While campaigning to become president, Biden pledged to make two-year community college free for all Americans and make public colleges and universities free for families with income below $125,000. He also expressed interest in increasing support for undergraduate students of families with exceptional financial needs by doubling the maximum amount of a Pell grant – a form of federal student aid that doesn’t need to be repaid.
Fifty years ago, Pell grants covered “70 to 80 percent of the cost of a four-year degree at a public institution; today, that percentage has been cut in more than half, to roughly 30 percent,” according to Biden’s campaign proposal.
UNLV Assistant Professor of Higher Education Federick Ngo said the situation stems, in part, from declining state and federal support for public colleges and universities in the past 10 years.
“So that means more of the burden has been taken on by individuals and families, and that’s why people have had to take up loans to pay for the balance,” he said.
But Biden hasn’t been able to make good on those campaign promises as Congress has continuously shot down the White House’s proposals. Now, the president is moving forward with his student loan debt relief plan without the approval of Congress, citing a 2003 law that gives the secretary of education extra powers during a national emergency, such as the COVID-19 pandemic.
The U.S. Department of Education has released some information about what to expect, and recommends borrowers sign up to get information as it’s released.
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