Biden’s Plan for College Student Loans

By Shania Pagan

The thought of paying off loans post collegiate life is a massive worry for many. The current administration has voiced their support for at least a $10,000 student loan forgiveness plan for some, but not all students. 

Speaker of the House of Representatives, Nancy Pelosi and Democratic Senate Majority Leader Chuck Schumer, have pushed for President Biden to issue an executive order cancelling at least $50,000 in student debt. During a CNN Town Hall in February, Biden suggested that forgiving that amount would disproportionately benefit those who go to private colleges that are considered to be elite. 

One of Biden’s first executive orders of his presidency, was to pause the student loan payment for eight months until September 30, 2021. This means there is currently no accumulation of interest on loans, and no collection of student loans entirely, unless you specifically request for the continuation of payments. 

As recent as Thursday, March 11, Biden signed the American Rescue Plan Act, which calls for all student loan debt forgiveness to be tax free from December of 2020 to December 31 of 2025. 

Pausing and forgiving all debt are two different actions. The latter is likely not going to happen for a while. As for the complete forgiveness of loans, Biden has expressed that he is “prepared to write off $10,000 of debt, but not $50,000,” further stating that he doesn’t have that authority.

On Thursday, March 18, 2021, it was reported that Biden canceled $1 billion in student loan debt. However, this was in reference to the 70,000 student loan borrowers whose schools were found guilty of deceptive communication with students and abrupt closure in 2020 that affected their loan returns. It was not a move from the administration made towards total loan forgiveness. These students were receiving partial compensation during Trump’s presidency. Officials in the Biden administration and the U.S Department of Education, now offered them complete forgiveness.

A legitimate timeline of the administration’s future plans for entire loan forgiveness has been pushed aside during the past few months. The primary focus has been COVID-19 vaccine distribution. In a February poll by OneClass, an educational platform, 3,000 college students were asked whether they believed student loan forgiveness would actually be implemented in the near future or not, 63.5% said they don’t.

In regards to private universities and the loans received from them, the administration’s plan is practically nonexistent. This is contributed to the different sources of funding given to both private and public institutions. Public universities are primarily funded by the state government, and private universities are supported through student tuition fees and individual endowments to schools.

Out of 45 million loan borrowers, The Federal Reserve has estimated that there is an owed debt of $1.7 trillion in the United States, as of 2020. According to studies, 69% of college students have taken out loans, and they graduate with an average debt of nearly $30,000, both private and federal. The likeliness of any major advancements made towards this issue is slim.

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