What to Know About Biden’s Student Loan Forgiveness Program

Jake Hawkins, Staff Writer

On Aug. 24, President Joe Biden announced his student loan forgiveness program, which provides up to $20,000 to federal student loan borrowers to pay off tuition debt. The plan only applies to federal-owned student loans, rather than private student loans. Individual loan borrowers that make less than $125,000 a year, along with heads of households and married couples that do not make at least $250,000 a year, will receive up to $10,000 of forgiven student loans. Students enrolled in college can receive a federal Pell grant that reduces student loans by $20,000.This program developed because on average students pays off their student loan debt at 45 years old or older, way after finishing school. 

Recent news of this program has stirred up controversy. On one hand, the news has upset some people as they do not want to raise taxes as a result of their money going towards other students’ debt. Others endorse this plan as they believe college tuition and student loans are far too expensive. From more than 45 million borrowers, the average total federal student loan debt starts at $1.6 trillion. Graduate school loans also apply under the conditions for loan payoff. Parents that took out a parent plus loan are also applicable to receive student loan forgiveness.

The plan will cost around $300-$500 billion, which leads to a lot of opposition from those who believe that the large sum could be used elsewhere. 

“People were struggling to pay off their loans. So it’s not like they had this money to spend anyway. If it became extra spending, it could add to the inflation that the economy is experiencing. So I don’t know, that it’s gonna have that big of an impact on the economy and in the traditional ways of causing inflation and things like that,” Miami Palmetto Senior High School  AP Macroeconomics teacher Joel Soldinger said. “Sometimes, doing the right thing for people that are struggling, is the right thing to do. It might not be the most popular thing. But these are people that were generally not very well off struggling, trying to get better, by educating themselves.”

The plan could be shut down in court, but the chances of that happening remain unknown. By early October, students who currently attend college along with those who have already graduated will have the chance to apply for loan forgiveness. Refunds for college loans paid for during the pandemic will also receive coverage.

Republicans recently considered taking legal action against the program, as research now shows a potential $2,500 burden per taxpayer if the program goes into effect. In spite of the Republicans’ lawsuit, Democrats have been pushing for this policy for years.