President Biden Offers College Loan Debt Relief to the Middle Class . . . Here’s What You Need to Know
President Biden officially announced his plan to offer college loan debt relief to the middle class. It wasn’t a huge shock. Biden made college debt relief a campaign promise, and there was talk this was coming.
Here are the broad strokes:
1. For starters, the moratorium on federal college loan payments has been extended through the end of 2022 . . . but after that, payments will resume for the first time since the pandemic started.
2. Student loan forgiveness only applies to the people who need it the most . . . those earning less than $125,000 a year. Or, if they’re married, $250,000.
3. Borrowers who went to college on Pell Grants will see their debt cut by $20,000. A Pell Grant is typically given to undergraduate students who have “exceptional financial need” . . . so low-income families.
4. All others under the $125,000 limit, who have federal student loan debt will receive $10,000 in forgiveness.
5. The White House also said that when payments resume, borrowers with undergraduate loans will be able to cap repayment at 5% of their monthly income. It was previously 10%.
The White House says this was needed because the cost of college has nearly tripled since 1980, even after accounting for inflation. But federal support has not kept up, which has put too much stress on low- and middle-income families.
The average undergraduate with loans now graduates with nearly $25,000 in debt, and not all careers, like education, offer salaries big enough to pay it back comfortably. The White House claims Biden’s plan will provide a boost to 43 million everyday Americans.
Obviously, the reaction is all over the board, depending on which cable news shows you watch . . . or which politicians you listen to.
Some conservatives say Biden is doing too much and this is socialism . . . some liberals say Biden isn’t doing enough, and he should cancel ALL student debt . . . but Americans in the middle who are struggling will TAKE IT.
In one poll, 57% of people support Biden’s plan to cancel student-loan debt . . . with 37% saying they “strongly” support it. 33% of people said they OPPOSE the plan, with 24% saying they “strongly” oppose it.
People between the ages of 30 and 44 were most likely to support it . . . while those 65 and older were most likely to oppose it.
But in a separate, CNBC poll released earlier this week, 59% of Americans said they were worried that forgiving debt could make inflation worse.
For the record, the White House has dodged questions on who will pay for the student loan relief.
Biden gave a speech to discuss the plan, and afterward, he was asked if this relief was FAIR to those who didn’t take loans, or who already paid them off. And his answer was, basically, life isn’t fair.
He said, “Is it fair to people who . . . do not own multi-billion-dollar businesses if they see one of those guys getting all the tax breaks? Is that fair? What do you think?” (Here’s that clip. And here’s the full speech.)