President Biden’s student loan forgiveness plan gets mixed reaction
President Joe Biden on Wednesday announced his administration's plan to manage student loans.
“Both of these targeted actions are for families who need it the most: working and middle-class people hit especially hard during the pandemic,” Biden said in remarks at the White House Wednesday afternoon.
In a tweet, the president said the move keeps with his campaign promise.
In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
— President Biden (@POTUS) August 24, 2022
I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
Borrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for the $10,000 loan forgiveness, Biden announced. Those who also receive Pell Grants, which are reserved for undergraduates with the most significant financial need, would be eligible for an additional $10,000 in relief.
The Department of Education has yet to detail how borrowers can apply for relief.
However, the move is already prompting reactions from both opponents and supporters.
"$10,000 is good. I thought it would be more than $10,000 because to be honest $10,000 doesn’t even cover one semester of college and if you’re going to college four years, that’s eight semesters of college so you still have 7 other semester to pay for. But ten is better than nothing,” said Jasmine Bosnino, Co-owner of Power Nutrition in Palm Desert.
She graduated from Arizona State University in 2019 with a degree in Exercise and Wellness and Sports Nutrition. Jasmine's status as an out-of-state student who was also enrolled in her school's honors program attributed to the high cost of her tuition. She now has roughly $130,000 in federal student loan debt.
Jasmine is one of the more than 45 million borrowers that have contributed to the nation's ballooning $1.6 trillion student loan debt total.
She said she hasn’t started chipping away at her debt yet, and had been waiting to see what action the White House would take before deciding when to start paying off her loans.
The federal government had previously paused student loan repayments because of the COVID-19 pandemic, which on Wednesday, Biden announced would be extended one final time through December 31, 2022, with payments resuming in January 2023.
Jasmine’s father, who took out loans to help his two children go to college, also weighed in on Biden's student loan action.
“If you’re expecting the government for handouts, it’s not going to happen. This is just almost once in a lifetime opportunity to have a break, so take advantage of it,” said Chaim Bosnino.
It's an opportunity he didn’t get when he was a college student who had immigrated to the U.S. from Israel to pursue higher education.
“I worked in four jobs to be able to pay for my engineering in the early 70’s. I didn’t speak a word of English. I didn’t know how to read and write, but I was self-taught and I made it, said Mr. Bosnino. He added, "the government, instead of spending so much money on weapons and wars for so long, should invest more money in education because that's also the security of the country."
Chaim said he's hopeful the federal government will also take action on high interest rates attached to student loans. "Some people pay for 15-20 years, and before you know it a third of that amount is interest rate," said Mr. Bosnino. He added, "the banks are getting our money at zero percent. They stick it to us at close to seven. There's something wrong with that and that's our money."
His daughter will have until the end of the year to decide how she wants to repay her student loans.
“Now, is there a line where it’s like ok why should I have to pay for this person to go? But it’s like, you paying for this person to go – what if they cure cancer? What if they cure something in the future? What if they do really great things and they wouldn’t have been able to do that if you didn’t pay a little bit towards that.” She added, "if you want society to grow, sometimes you got to help because not everybody can afford to go to medical school, not everybody can afford to go to law school, not everybody can afford certain things, but that doesn't mean they shouldn't have access to it."
Democratic Congressman Raul Ruiz also issued a statement, praising President Biden for taking action on student loan debt:
“Right now, the burden of student loan debt is holding many in our communities back from securing their financial futures and fully contributing to our economy. That is why as Chair of the Congressional Hispanic Caucus, I met with President Biden and urged him to deliver much-needed forgiveness to student borrowers. I applaud the action he took today that will help ease local families’ financial burden and boost educational attainment for Americans across the country.”
Congressman Raul Ruiz, M.D. (CA-36)
Republican Congressman Ken Calvert issued a statement as well, criticizing President Biden's federal student loan debt relief plan:
“President Biden’s decision to arbitrarily forgive up to $20,000 in student loan debt for families making up to a quarter million dollars is unfair and inflationary. This move is a slap in the face of any family that saved for their child’s education or any college graduates who worked tirelessly to pay off their student loans. It’s also outrageous to ask the millions of hard-working Americans who didn’t go to college to pony up the tax dollars to cover the costs of sending the children of upper-middle class families to college.
This debt won’t magically disappear, it will be paid for by taxpayers to an estimated tune of more than $300 billion dollars, with outstanding student loan debt projected to return to its current level of $1.6 trillion in just four years. Once again, the Biden administration is advancing massive amounts of inflationary spending on the backs of American taxpayers to transfer money to its favored political supporters. This game of picking winners and losers is wrong and it’s propelling our economy deeper into a recession.
President Biden’s plan does nothing to address the root problem, which is the rising cost of a college education. Since 1980, the average cost of a college education has risen by 1,200%. Instead of helping to curb those costs, today’s announcement will have the opposite effect and raise tuition rates across America.”
Congressman Ken Calvert (CA-42)
Borrowers can sign up to receive notifications regarding when relief will be available in the coming weeks by visiting StudentAid.gov/debtrelief.
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