President Biden announces student loan forgiveness of up to $20,000
By Connie Lee and Samantha Padilla, September 6, 2022
President Biden announced Aug. 24 that the US Department of Education would unveil a three-part plan to promise $10,000 in federal student loan forgiveness.
According to the White House, the three-part plan begins with debt relief for those who have been financially impacted during the pandemic. Pell Grant recipients with Department of Education borrowed loans receive up to $20,000 in loan forgiveness. Borrowers who are not eligible for Pell Grant will receive up to $10,000 in debt relief. In order for the repayments to be successfully adjusted, the repayment was paused until December 31, 2022.
“Based on the news I’ve heard about President Biden’s student loan forgiveness, I can honestly say it’s a huge relief and I’m excited to see how that plays out,” said Edgar Castañeda, a biology major. “I feel this would definitely help our students like me who are struggling to pay off large loans while still trying to manage our ability to afford our tuition and fees.”
The second part of the plan is to ensure that the student loan system is affordable for students. That way, students pay half of the monthly payments, resulting in a reduction of more than $1,000 for future loan recipients. The ultimate plan is to lower the cost of college by increasing Pell Grants and making community college free.
In America, an estimated $1.6 trillion in federal student loan debt represents significant student surcharge. Student loans are the most well-known form of consumer borrowing for higher education in the United States and have grown tremendously over the years.
Under President Biden’s plan, 43 million borrowers will be granted loan forgiveness and about 20 million borrowers will be forgiven student debt the White House.
With the recent announcement of student loan forgiveness, several CPP borrowers have contacted the FAFSA asking if they are eligible for the forgiveness plan and would like to know how to enroll in the process. The official FAFSA website crashed after President Biden’s announcement in the first three days of the proposal.
Federal loans are forgiven after a process to qualify for the forgiveness plan. For borrowers who are already on the system, their loans will be canceled automatically as their income information is already on file. However, those who are not in the system must log in and verify that they are eligible, e.g. B. Provide information such as their annual income and the number of loans they have.
“I have a feeling there’s always going to be a catch,” said Denise Benavides, a social work student. “I am glad that we are being supported and some of the debt is being forgiven, especially during today’s difficulties. I think it will also affect the students of the future generation because tuition fees are increasing every year despite inflation.”
Student debt relief will help over 8 million borrowers, with 87% of student loan cancellations benefiting those whose annual income is less than $75,000, and 13% of the relief will help borrowers with individual incomes of $75,000 to $125,000.
“Finally. That’s what our president has been promising since his election,” said David Jimenez, advisor and graduate student at the CPP Office of Financial Aid and Scholarships. “I thought it was kind of out of the door and maybe a little overpromising that he wasn’t delivering.” I thought there would be more, but at the end of the day it’s better than nothing, so I think it’s the help no matter what.”
According to the Department of Education, the student loan debt relief application will be available in October and will take about four to six weeks to fully process.
Feature image courtesy of Sasun Bugdaryan.