Biden’s new student loan forgiveness plan could forgive up to $20,000 in student loan debt

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Peter Banister

In August of 2022, President Joe Biden issued a federal order to forgive up to 20,000 of student loan debt to those needing financial aid.  This plan was made by an executive order to help students with economic hardship such as the effect of the COVID 19 pandemic, as well as the increase in college prices in the late 2000s.  

In order to be eligible for the entire  20,000, you must be on the Federal Pell Grant and receive other financial assistance from the government.  The Federal Pell Grant is money given to students who display a need for existential financial aid.  The recipient of the pell grant also must be an undergraduate student.  If you don’t have access to the Pell grant, the max the government will forgive is up to $10,000.  

“I was determined to go to college and finish college when I started, but had I not received the Pell Grant, it would have taken me a lot longer. And I can assure you, the amount that I have paid in taxes throughout my career has paid for that Pell Grant,” counselor Liz Nelson said.

This program along with the Pell Grant would help students get the opportunity to pay off and forgive loan debt and will also set them up to be successful in life after college while searching for a career.  

If you would qualify for the 10,000 amount, you still must meet the income requirements.  In order to receive the regular amount of debt relief, your income must have fallen below 125,000 or if you’re a married couple 250,000.  The amount of money you would get back for debt relief is capped at the amount owed debt.  In other words, you would not be profiting from this new government effort.  

Any scholarship is helpful, whether it’s free purchasing books or helping pay for your rent or going on board, any income that you can get to help offset the expense of college is going to help your pocketbook,” Stillwater counselor Liz Nelson said.

This is regarding how scholarships can affect debt along with loan forgiveness.  Loan forgiveness would pay money owed to the school on overall tuition, however, scholarships usually include smaller things like helping pay for rent or getting supplies you may need for a class.   

The first step in the process is that you must make sure that you are within the deadline of when applications will be taken.  Currently the final has been extended to Dec 31, 2022.  After this date, no new applications will be accepted and you must either wait for any future extensions to the program or seek debt relief in other ways.  

“There shouldn’t be a perpetual view that anyone might get forgiven in the future,” English teacher Granger Taft said

Currently, final applications for forgiveness end at the end of the year but could be extended.  This would be a bad idea going forward because it will automatically pay for people’s expenses no matter what program they take or the school they go to.  

In the next step in the plan, the government will try to relieve low to middle-income family applicants with the help of the Public Service Loan Forgiveness plan.  This plan could possibly relieve all debt if you are employed by a non-profit or a military family.  Public Service Loan Forgiveness can be another option for student loan forgiveness.  In order to take advantage of the PSLF, you must take part in community service work for over 10 years which may make you eligible to cancel out student loan debt.  

“The majority of loan forgiveness is still that public service loan forgiveness program which has been completely revamped in the past year or so. Yes to where it’s, you know, the acceptance rate is much, much higher,” counselor Alec Shern said.

The majority of loan forgiveness is still that public service loan forgiveness program.”

— Alec Shern

On the topic of Public service loan forgiveness, there are many opportunities like this as well for when students graduate college to pay off debt. In fact, the program’s acceptance rate is higher than its ever been.  Over the past few years, the plan has also completely changed to provide higher-quality assistance to students.  

After the debt relief plan expires, the Biden administration will work on improving how student loans work throughout the country.  For future college students, the president would like to make Community college free as well as raise the max amount given away from the pell grant to provide further aid.  Doing all of this will hopefully give lower-income students a better shot at a good education if they desire it.  

When asked if the forgiveness initiative would incentive students to attend college, world history teacher, Kris McCarthy said,  “I think it would encourage more kids but in my brother’s situation, he was encouraged to go to college. It wasn’t the right choice for him. He didn’t. He didn’t do well.”

While the current plan only covers loan forgiveness, Biden intends to make community college free which would help more students not just economically but could help undecided students with what they would like to do for a career.  

The loan forgiveness plan provides a wonderful opportunity to those who are economically challenged or have been put in debt because of student loans.  Student loan forgiveness will also benefit those who are just out of college and whose debt is taking up most of what they make and can’t afford much.  If the new student debt plan goes into effect it will also benefit all students with free community college and more safety for borrowers.