Written by Sara Hook // Graphic by Cooper Turman
President Joe Biden announced a three-part student loan relief plan on Aug. 24, canceling up to $20,000 in student debt for an estimated 43 million people. Those millions include over 35% of Harding students, institutional researcher Dustin Howell said. The White House released a statement describing the plan the same day it was announced.
“President Biden believes that a post-high school education should be a ticket to a middle-class life, but for too many, the cost of borrowing for college is a lifelong burden that deprives them of that opportunity,” the statement said. “This plan offers targeted debt relief as part of a comprehensive effort to address the burden of growing college costs and make the student loan system more manageable for working families.”
The White House statement cited the economic crisis of the pandemic as the reason behind the decision.
The first step of the plan is extending the pause in loan payments until Dec. 31. Part two is to provide debt relief. Pell Grant recipients are eligible for up to $20,000 of debt cancellation, while non-Pell Grant recipients may get up to $10,000. Only those who make less than the income cap can receive relief — $125,000, or 250,000 if married. Part three involves an overhaul of the student loan system, proposing a new version of the income-driven repayment plan to reduce monthly payments. The Department of Education is also taking steps to hold accountable colleges that have contributed to an excess of student debt.
Senior Nicholas Emlaw said he will accept any loan forgiveness he is given, but he is uncertain about how the government plans to pay for it.
“Although I’m more than happy to accept the free money… my questions lie in underlying motives,” Emlaw said. “Where the money is coming from.”
Like Emlaw, Chair of the Finance Department David Johnson advised students to make use of the relief money.
“I’d take it, because, you know, it is available to you,” Johnson said. “If you don’t think you should do that yourself, if you wouldn’t feel right about it, then follow your conscience in that regard.”
In Biden’s address announcing the plan, he cited deficit reduction as where the money comes from. Deficit reduction is the process of reducing the amount by which a government’s spending exceeds the money it receives in taxes. Johnson said this debt reduction is not the same as having excess funds.
“We had a deficit,” Johnson said. “This is going to be a smaller deficit. That’s not a source of money.”
Jay Simpson, senior associate director of Financial Aid Services, said students should look into their own situations to make sure they get the aid they are eligible for.
“While we all may have our opinions about this news, this is action taken by the president,” Simpson said. “And we encourage student loan borrowers to make sure their contact information is up to date with their loan servicers so that they will receive direct communication about their own situation. Loan servicer information is available by logging into studentaid.gov.”
