By Tessa Cherian
For many seniors, fall is known as the season of stressful college applications. Students often take into account the prestige of a prospective college, the majors offered or the location. However, the most pertinent factor for many is the tuition and expenses required to attend college. With the fear of debt, many students apply for scholarships and financial aid, but that does not always eliminate the need for a loan.
Today, the United States’ federal student loan total exceeds $1.6 trillion, belonging to about 43 million borrowers. To tackle this outstanding issue, as well as the hurdles brought by the pandemic, the Biden-Harris Administration has announced a student loan forgiveness plan to help working, middle-class federal student loan borrowers reduce their debt. The plan has gained publicity for claiming to forgive up to $20,000 in student loans.
The plan comprises three parts. Firstly, federal student loan repayments were paused during the pandemic and will remain until December 31, 2022, providing students more time to repay their loans. Secondly, the plan discusses providing debt relief for students from low-income and middle-class families. Pell Grant Recipients will receive up to $20,000 in debt relief, while non-Pell Grant recipients will receive up to $10,000. However, to be eligible for any debt relief, borrowers must have an individual income less than $125,000 ($250,000 for married couples) per household. Lastly, new income-based repayment plans will be introduced to reduce monthly payments for low-income and middle-class borrowers. The borrowers’ unpaid monthly interest will also be cut down, so federal student loan borrowers can solely focus on paying their principal loan amount.
Source by Areej Zaidi
Senior Natalie Bak stresses over filing financial aid forms as the cost of attending a college is on the rise.
“I hope this plan goes into effect because it’ll help out more than those going to college next year, but current college students who are in a lot of debt,” senior Aditi Kaur said.
“I think that the federal government should continue to take initiatives dealing with student debt because students should not have to fear being in debt for trying to educate themselves,” senior Elizabeth George said.
“The point of action being taken by the Biden administration is crucial in helping to provide relief. I’m hopeful that the plans will assist the graduating class of 2023 in paying for college,” senior Birrkaren Singh said.
Ultimately, the student loan forgiveness plan focuses on bringing about a smooth transition for federal student loan borrowers to start repaying their loans, reducing the amount of debt owed by each borrower and most importantly, preventing the further growth of the federal student loan portfolio. Many students and families see this plan as hope for a debt-free future.