Biden loan forgiveness is something many wouldn’t have dreamt of even in their wildest dream. It came as a welcome shock, especially to students who had to take out student loans but couldn’t pay them back. So when President Biden announced that he is going to forgive student loans, Americans were relieved. This was a promise he made before he got into the Office and he is fulfilling it now.
Why is Biden Loan Forgiveness Important?
Biden stresses that education shouldn’t be a financial burden for learners and their families. The reality is different though because education in the US costs lots of money. Many people can’t afford it and have no choice but to borrow money for their education. This loan later turns out to be a burden that some are unable to pay back in their lifetime. Some people don’t even attend college or university after high school because of student loans. This is understandable because nobody wants a considerable debt to hang over their heads for a long. Therefore, the Biden loan forgiveness is a relief for Americans after facing the COVID-19 crisis.
The Expensive Cost of American Tertiary Education
Since a long time ago, tuition fees in tertiary institutions have increased. The cost of education increased so much that many lost hope of going to colleges or universities. Even support from the government and private organizations didn’t do much to alleviate the financial burdens caused by education. Yes, there are many grants and scholarships for students, but they don’t cover the entire cost of education. Some borrowed money for accommodations, books, and so on because these were not covered by grants or scholarships. For example, grants and scholarships are used to cover at least 80% of a student’s studies. Nowadays, they only cover 50-60 percent. Several students who aren’t from rich families had to find other sources of funding to supplement the grants. Hence, they get loans to help themselves and their families.
A study found out that many undergraduates owe a debt of almost 25,000 dollars each. Millions of students took loans, while some ended up not even completing their studies. Those who didn’t meet their studies have no degree and couldn’t get good-paying jobs. As a result, they were unable to repay the money they borrowed.
Can loan forgiveness tempt them to go back to school?
The total number of unpaid student loans on the government’s list has accumulated to trillions of dollars. This is indeed a burden for American students whether they are in school or have dropped out. Students from working families were hit harder due to the pandemic, which caused economic problems. They and their families are unable to save money, pay bills, and so on. It is hard for them to even create wealth, own homes, buy cars, start a business, and save for later years. Students who are from poorer families find it even harder to meet up with their basic needs and have to drop out. They drop out to get jobs to get by and repay the loan they owe without completing their studies.
The Department of Education in America analyzed that one-third of those who took student loans are now dropouts. They couldn’t afford to attend classes because they work while studying and this has affected their attendance. So they dropped out and found full-time jobs to survive. Furthermore, this worsened the students’ situations because they are now without a degree and won’t get good-paying jobs. The situation has led to many students defaulting on their loans for many years. In fact, it is not surprising to see a 60-year-old man or woman still paying his/her student loan that was taken four decades ago. The effect this has on such people isn’t small, and this includes bad credit and a lower wage. In addition, black students owe more loans than their counterparts, especially those who studied in the mid-90s. Some of them are yet to pay off 95 percent of their loans today.
However, now that Biden has announced his Biden loan forgiveness plan, they don’t need to pay back. Biden loan forgiveness has relieved many burdens on the student’s and their family’s shoulders.
About the loan forgiveness
Will Biden forgive student loans? Is the student loan forgiveness by Biden true? President Biden announced in August 2022 his resolve to fulfill his election promises to students. During his speech, he outlined his plans to help those with student loans which are divided into three parts. Biden aims to relieve many Americans of the financial burdens plaguing them. The plan will remove 10,000 dollars from student loans of those whose annual income isn’t up to 125,000 dollars.
Additionally, 20,000 dollars will be removed for those who got Pell grants. For those whose annual income isn’t up to $15,000, the government will pay all or nearly all their loans. However, this type of Biden student loan forgiveness is mostly for those who dropped out and yet still owe student loans.
Reactions From Americans
Students in America are happy about this opportunity given to them by Biden. One student commented that even though he is on grants, he didn’t have financial security due to a lack of money. He needed money to buy educational materials, feed, get housing, and so on. So even with his grant, he had to get loans because he couldn’t work due to his class schedule. But with Biden’s loan forgiveness plan, he can study happily without thinking of where to get money every day.
Biden loan forgiveness relieves families and students from student debts. It is a total package that tackles the problem of expensive educational costs for students in America. Furthermore, it will make student loans more accessible to students from low-income and working families. In addition, the government will manage the student loan system better. Lastly, Biden hopes that students can return to their studies and don’t have to worry about tuition.
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