Biden to cancel up to $10,000 in student loans
President Joe Biden announced a student loan forgiveness plan in late August that could affect roughly 43 million Americans, according to the White House.
The plan will forgive up to $10,000 for borrowers who make under $125,000 a year and up to $20,000 for couples who make under $250,000 a year. Individuals who received Pell Grants, a form of financial aid for students with exceptional financial need, will also be eligible for up to $20,000 in relief. Loans taken out after June 30, 2022, will not be forgiven.
One of those eligible individuals is Tasia Mochernak (‘16), who received a Pell-Grant to study at the University of California, Los Angeles. Under Biden’s plan, she is eligible for complete debt cancellation.
“It [will] be incredibly helpful to have my debt forgiven,” she said. “It allows me not to funnel all of my income into just survival and begin looking at other things like setting financial goals for myself.”
Others, like TPHS social science teacher Michael Montgomery, feel that they have been left out. Montgomery, who took eight years to pay off all $25,000 of his student loans, will not benefit from Biden’s program.
“I never had a whole lot of debt, but it would have been nice to have [loan] forgiveness back then,” he said.
From a larger societal perspective, however, Mochernak thinks that the plan is fair, even for people who will not benefit from it.
“If I was not somebody who had student loan debt, I would view this as a fair measure because if the federal government has this money and they’re able to allocate it, why shouldn’t they?” she said.
Still, in Montgomery’s opinion, the money from the forgiveness plan should be directed at people who need it the most, not those who made a conscious choice to take out loans.
“If you have to take out a loan, you’re making that choice,” Montgomery said. “You know how much it costs.”
Montgomery also said the maximum yearly salary that qualifies borrowers for debt relief is too high.
“If you are making $125,000, I think you should be making enough to pay off your loans if you are organized with your finances,” Montgomery said.
Neither Mochernak and Montgomery believes enough is being done to solve the overarching issue causing the student debt crisis – the rising cost of higher education. For future college students who want to minimize their debt, Mochernak recommends that they consider attending state universities and apply for as many grants and scholarships as possible, as they do not require repayment.
“People don’t always recognize that a financial aid package you are offered includes a loan that you have to repay,” she said. “You need to make sure that you’re conducting the correct research.”
The application for loan forgiveness will be available by early October. Loan holders can be notified when it is available by signing up at the U.S. Department of Education subscription page.
