According to the CNBC news organization, the collective debt of Americans exceeds $4 trillion for the first time in history.
Student loans account for $1.5 trillion (37.5%) of the overall collective debt in the U.S.
This easily surpasses most other sources of accumulated debt in the United States.
The Federal Reserve reports that approximately 44 million Americans have student loan debts, averaging approximately $32,000 of debt per individual, exclusively in student loans.
President Joseph R. Biden, still operating within his first 100 days of presidency, has piqued the interests of students everywhere, with proposals to make 2-year community colleges free for all, create student loan forgiveness programs, and promote free tuition for 4-year universities.
So, what is the catch and how realistic are these proposals? Let’s check the facts, analyze the data and decide for ourselves.
On the campaign trail, the Biden-Harris team bolstered their platform under the claim that they planned to, “Strengthen College as A Reliable Pathway to The Middle Class.” They suggested a plan to encourage federal-state partnerships, by way of investing in college readiness opportunities, and ready to work employment programs.
This would involve community colleges waiving tuition costs for 2-year community colleges; provided students utilize their degrees and certifications to join the work force upon graduation.
This cost would require an initial investment of $8 billion to community colleges across the nation; to help provide the financial resources to equip schools with the technology, equipment, and staff needed to improve student success and curriculum completion.
President Biden is willing to allocate that funding with Congress’s approval.
With tuition costs, more than doubling for 4-year universities since the 1990s, undergraduate degrees have become more and more difficult to achieve financially. Under the influence of Senator Bernie Sanders and First Lady Dr. Jill Biden, the president is proposing more affordability for students attending 4-year college institutions.
This pitch includes waiving tuition costs for all students with a family income below $125,000. This would have a significant impact on the affordability of higher education, as only 5.4% of U.S. households make more than $100,000 annually.
Grant accessibilities and student loan forgiveness/payment plans, are another big project that the Biden-Harris administration are working on.
Pell Grants, an income based award for individuals whose families make less than $30,000, would be restored to their original value, somewhere around 60%-70% of tuition coverage in the 1970s.
Student loan forgiveness, a topic that interests Gen x and Millennials alike, is yet another big project in the works for students of all ages.
Multiple approaches are being considered and debated for this ever-present dilemma. One approach Biden is suggesting, is income based repayment plans.
Anyone making under $25,000 gets complete loan forgiveness, and anyone making above that mark would only have to pay 5% of their discretionary income for 20 years before 100% loan forgiveness.
Another relief aid for student debt the Biden administration is proposing comes as an addendum to the COVID-19 relief bill. Here the Biden administrations supports cancelling up to $10,000 in student loans for each individual.
Sources at Nerdwallet.com report that this would clear student loan debt for approximately 15 million students.
Several other solutions, each with their respective criteria, are being tossed around in D.C. such as waiving or decreasing debt for those who work in public service, used their student loans for undergrad degrees, attended a public college/university, etc. All of these promises of hope, equality and financial security are a classic trademark of the Biden name, but the real question is, can he make it happen?
So far, with less than 100 days in the White House, Biden is showing progress in keeping his word to the American people. Among the 31 executive orders Biden has already signed since his inauguration, he has also extended and expanded the administrative forbearance on federal student loans until October 1 at the earliest according to CNN.
What this means for students is that no payments on existing loans or loans acquired before October 1 are due until after that date. Additionally, what this forbearance does is halt any interest accruements during this time period.
This will save hundreds of thousands of dollars for student with student loans, new or old.
In the meantime, Biden is waiting for confirmations of his appointed legal teams to investigate the constitutionality of his plans before taking hasty action.
With a Democrat majority, while slim, in both the Senate and House of Representatives, the chances of the Biden administration moving forward with their agenda over the next four years are historically, in their favor.
Hope, change and student debt relief are coming, and you can take that to the bank!