By Mariah Bennett | Staff Writer
On Wednesday, President Joe Biden announced his three-part plan for student loan relief, delivering on a campaign promise “to cancel $10,000 of student debt for low- to middle-income borrowers.”
The first part provides targeted debt relief to address the financial harms of the pandemic.
The second part makes the student loan system more manageable for current and future borrowers. It cuts monthly payments for undergraduate loans in half, and it fixes the broken Public Service Loan Forgiveness program by proposing a rule that specific borrowers who have worked in eligible places — such as a nonprofit, the military or the government — receive appropriate credit toward loan forgiveness.
The third part includes the protection of future students and taxpayers by reducing the cost of college and holding schools accountable when they hike up prices.
According to the White House fact sheet, the Department of Education “will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples).” Additionally, Biden extended the pause on federal student loan payments until Dec. 31 and said payments will resume in January 2022.
Dr. Finley Edwards, clinical associate professor of economics, said about two out of every three college students take out loans to pay for their education. He said he is unsure of how student loan relief will affect Baylor students.
“Baylor students are certainly affected by inflation, as much as anybody else,” Edwards said. “This is certainly going to increase inflation. It potentially might make students more likely to borrow; it’s hard to say.”
Fort Worth senior Nelley Sobh currently has private and federal loans and said she needed them in order to afford college. Sobh said she thinks Biden’s decision is fantastic.
“I come from a low-income, single-parent household, so any kind of help is appreciated … especially with how expensive Baylor tuition is,” Sobh said. “It’s a great sense of relief.”
Baylor alumna Karina Young is currently enrolled in a master’s program at the University of North Texas while working in the research and engagement division at Moody Memorial Library. She said she has been anticipating an update on the current student loan debt situation.
“Although I’m still unsure of all of the specifics and requirements for forgiveness, I assume that I will be eligible to have $20,000 forgiven,” Young said. “All of my loans are direct loans issued by the federal government and have varying rates of interest.”
Young said she is grateful for this action, as it puts her one step closer to being debt-free and able to pursue homeownership.
“I will still have a remaining loan balance after this measure goes into effect,” Young said. “I am fortunate, though, that my employment with Baylor allows me to qualify for Public Service Loan Forgiveness. Once I’ve completed the 10-year requirement for total forgiveness, I will officially be debt-free and look forward to celebrating at that time.”