President Biden has announced major news that would relieve the debts of more than 43 million students in the USA. It has been confirmed by the current President that the federal student loan of up to $10,000 for eligible borrowers and $20,000 for Pell Grant recipients will be forgiven.
The recent news has taken over the students of the States. President Biden has made this announcement to keep up the promise he made in his campaign. Students all over the country with student loans are rejoicing now as $10,000 has been forgiven overnight. It is better for Pell Grant borrowers as $20,000 has been canceled.
Miguel Cardona, the U.S. Secretary of Education, has stated that the student loan forgiveness will be helpful for working and middle-class people as it would give some room for them to vent. Amidst the pandemic, the world economy has been greatly shaken. The student loan relief fund will provide the necessary support for these students to worry less about their lives and will help them to live a little free.
The point of providing the cancellation of student loans is to provide opportunities for students to make a better life for themselves instead of creating a debt trap that would take years to escape from.
The student loan is a targeted relief measure and is intended to provide support to the needy only. So, the $10,000 loan forgiveness is only valid for people who earn lesser than $125,000 per year or a lesser $250,000 in a couple of years.
The same is for the Pell Grant recipients. The only difference is that they will be forgiven $20,000, which is twice compared as the other students. Students who wish to get their student loans canceled should submit an application to verify that their income is within the above-mentioned range. However, the Education Department has the income information of more than 8 million borrowers. They might not need to submit an application to verify their income.
Who Will Benefit From This?
The Education Department has estimated more than 43 million people will get benefited from President Biden’s new relief strategy. It is also believed that 20 million people will enjoy getting their complete student loans forgiven.
Trianna Downing, when she heard the news, got excited and shocked about the relief fund that will get her $16,000 student loan to $6,000. She jumped with happiness and reached for her mobile to tell this happy news to her family.
Some people claim that it will bring down the racial wealth gap as it would help black students more than their white peers. However, it might not be entirely true. In the end, student loans help millions of students to take some rest from the exhaustion that it placed on them.
Disappointed Debt Borrowers
President Biden’s bold move to forgive the debt of students has been welcomed by most of the students. However, this decision doesn’t get the appreciation expected from previous debt borrowers who have repaid their loans.
Former students who have borrowed money from Feds and repaid are now in huge disappointment because they had to repay it with their own money and hard work, while the present students who have their loans not paid get their loans forgiven. Some people are extremely frustrated, stating that if they hadn’t cared and didn’t pay the loan, theirs would’ve also been forgiven.
On one side, people are getting mad about this loan relief sanction as it is delayed and doesn’t benefit them. On the other side, people expected more than $10,000 for normal loan borrowers and $20,000 for Pell Grant recipients.
Briana Ford, a loan borrower from Columbia, says that this news is hard to be excited about it. She says that the President’s relief announcement hardly intrigues her as she has a student loan of $60,000. Of course, the $10,000 will provide her temporary relief, but it won’t matter as she has to pay $50,000.
Pressley, Warren, and a few Senate Democrats called Biden to increase the cancelation amount. They requested the President to cancel at least $50,000 from each student’s debt.
There is another party who is also disappointed about this student loan cancellation. The Republicans have always been against a broad-based loan cancellation such as this. This is something that would make people who never went to college, who have repaid the loan on time, or who used their own money to get to college frustrated.
Opposing The Student Loan
Economists are majorly concerned about the announcement made by President Biden on student loan forgiveness. It would require around $230 billion to make this work, and it increases the chance of destabilizing the country’s economy.
The thing that concerns most economists and education experts is that it would only make the college education fees system worse. It wouldn’t bring the average cost of going to college down by any chance, but it has many chances to elevate the college fees.
To put it in simple words, the college education system will increase their fees structure and charge students an extra $10,000, which will be the same as not having their loan forgiven at this time. This has opened a proper excuse for the education system to increase its fee structure and experts suspect this would do no good in encouraging people to do higher studies.
55% Supported The Loan Forgiveness
More than 55% of the general public has supported the cancelation of $10,000 of student loans. However, most of them said that they support $50,000 cancelation even more. Democrats want the $50,000 loan cancelation to come into play. Amusingly, 41% expected the student loans to be completely cleared.
The surprising part is that the support for loan forgiveness is not high, even among the borrowers. Most people choose addressing the increase in the cost of college is more important than granting student loan debt cancelation.