President Joe Biden announced two weeks ago his cabinet and the U.S. Department of Education have developed a plan for federal student loan forgiveness. The three-part plan will cover up to $20,000 for those who have a federal student loan and have an income of less than $125,000 per year. Biden has also extended the pause on paying back student loan debt until Dec. 31, 2022.
Loanees who did not receive a Pell Grant, which is a type of aid given to low-income undergraduate students, will receive up to $10,000. Those who did receive a Pell Grant, however, will receive up to $20,000. If you are uncertain whether you received a Pell Grant, go to the financial aid office of your college or you can check your account at studentaid.gov.
Whether your loans qualify is another story. According to CNBC, over 37 million loanees will be eligible due to their loans falling under the William D. Ford Federal Direct Loan Program, which includes the Direct subsidized and unsubsidized loans as well as Grad loans and Parent Plus loans. Private loans, however, will not be forgiven.
Most borrowers will have to apply in order to receive forgiveness, but some are not required to, as the information for their income is already on file due to their repayment plans. Dec. 31, 2023 is the deadline set by the government to apply for forgiveness. It can take up to eight weeks for a borrower to have their loan forgiven.
Critics of this program have raised the issue of how the government can pay for this program. The Wharton Budget Model estimates that if only $10,000 of each federal loan borrower was forgiven, that still adds up to over $500 billion towards the country’s deficit.
Biden promises to not raise taxes on the middle class according to Forbes. Some speculate there could be other ways Biden plans to lower the deficit, like cutting off funds from social programs and raising taxes on the upper class.
Cofounder of the Higher Education, Race and the Economy (HERE) Lab at the University of California, Charlie Eaton, has supported taxing the upper class as well as corporations. In an article by Forbes, he says that “Those folks should pay more because they have benefitted from having a more educated workforce that produces the wealth that they have accumulated.”
Critics on the other side of the table say the amount being forgiven is not enough. NAACP President Derrick Johnson said to CNN that if the amount was $50,000 instead, then that would “drastically reduce the racial wealth gap.”
Alex Ross
Alex Rossis a third-year Communication student at Lock Haven with a focus in Journalism. This is his second year as an active member of the Eagle Eye and has been the Arts and Entertainment editor, News editor, and an active writer. He focuses on writing reviews for the A&E section, but has written stories for news, sports, and opinions. Outside of the newsroom, Alex enjoys record shopping, reading classic literature, and analyzing films. Alex hopes to work for a film or music news site as a writer or editor after graduation.
