On August 24th, 2022, President Joe Biden announced a Federal Student Loan forgiveness plan.

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 a college education is a lifelong burden that deprives them of that opportunity. During his political campaign, he promised to provide a wide-scale student debt cancellation. Recently, the Biden Administration is following through on that promise and providing families breathing room as they prepare to start repaying loans. This education relief plan is especially necessary after the economic crisis brought on by the pandemic, with tens of millions of people having lost their jobs.

However, this, by no means, is a definitive solution for student loans, but rather a step in the right direction. On average, tuition tends to increase about 8% per year. As of June 30, 2021, SU’s endowment was $1.81 billion. Just on interest alone, SU could have all students go on full scholarship and still make a profit.

The Department of Education will forgive up to $20,000 in loans to borrowers with debt held by the DOE, whose individual income is less than $125,000 ($250,000 for married couples) and received a Pell Grant. Nearly every Pell Grant recipient came from a family that made less than $60,000 a year, and Pell Grant recipients typically experience more challenges repaying their debt than other borrowers. Borrowers who meet these income standards, but did not receive a Pell Grant in college, can receive up to $10,000 in loan relief, per a White House statement and release.

A pell grant is a need-based federal financial aid provided to low and middle-class income students to attend college. The Pell Grant has provided need-based financial aid to an estimated 80 million people, according to the Institute for College Access and Success. For the 2022-2023 academic year, the Education Department stated that the maximum Pell Grant awarded was only $6,895. However, college tuition has only increased. Last year, the average tuition and fees were higher than between 2010 and 2011 at public, four-year institutions by 31.4%, one of the highest increases in tuition costs to date. And with new economic issues brought on by the pandemic, cost has not been adjusted for inflation or possible recession.

About 37 million borrowers are estimated to be eligible for loan forgiveness. Any loan held by the Education Department qualifies. However, students with loans taken out after June 30th, 2022 and those with private lenders are excluded in the relief plan. The relief is capped at the amount of a borrower’s outstanding eligible debt. The Education Department said they will release an application for loan forgiveness. Student loan forgiveness won’t trigger a federal tax bill. That’s because the American Rescue Plan of 2021 made student loan forgiveness tax-free through 2025, and the law covers Biden’s student loan forgiveness too, according to a fact sheet from the White House.

Coming out of the pandemic, families undoubtedly struggled in many aspects of life, but especially and maybe most notably, financially. Combine that with rising costs and inflation and you can see why now more than ever families will need financial support especially for college.

This might be a wake up call lawmakers about tackling the root of the problem. Those who don’t like this plan might feel more inclined in the future to put into action legislation that everyone can agree on. This education relief is a great direction towards making higher education more affordable, but this is not the solution. Lawmakers need to be aware of the future generation that will be running our country when they are debating on Capitol Hill. Through each student loan relief plan, hopefully we are getting closer to attaining higher education without years of student debt.

Aiden Walsh is a Sophomore finance major. His column appears biweekly. He can be reached at [email protected].

Published on August 29, 2022 at 11:23 pm