How Will Students in Debt Find Relief? The Truth is, No One Really Knows.
The fate of President Biden’s student debt relief plan is uncertain at best. And for incoming students, the implication of long-term debt can be quite troubling.
The progress of the debt relief plan for millions of students announced by President Joe Biden and his administration has been put on hold due to blockage in the United States court system.
On November 11, 2022, US News reported that “a federal judge in Texas blocked President Joe Biden’s student loan cancellation plan on Thursday evening, ruling that the effort to erase hundreds of billions of dollars in debt exceeds his executive authority and must be vacated.”
The ruling comes after a period of more than a year and a half where President Biden seemed unclear on whether or not the cancellation of student loan debt would actually happen or, more importantly, whether or not he actually had the executive authority to make it happen.
According to the Education Data Initiative, “The average debt for a 4-year Bachelor’s degree is $34,100.” While that may not seem like a large sum at first glance, it tends to be a bigger deal than you might think. The general consensus is that students graduating from college with student loans should expect to be paying those loans off for the next 10 to 30 years of their lives. This is consistent with findings reported on Bankrate, Best Colleges, Ramsey Solutions, Financial Panther, and a research report published at One Wisconsin Institute in 2021.
For an estimated 40 million borrowers, the student debt forgiveness plan announced by President Biden would “cancel $10,000 for borrowers making $125,000, or $250,000 for married couples, and $20,000 for those who also received federal Pell Grants.” (US News, 2022) But it’s not all rainbows and sunshine for everyone who qualifies. Since the program went live last month, several qualified applicants have argued that it would actually do more harm than good due to state tax consequences.
The fate of President Biden’s student debt relief plan is uncertain at best. And for incoming students, the implication of long-term debt can be quite troubling.
Less than three years ago, CNBC reported that between 2009 and 2019, the cost of college had gone up by more than 25% according to research published to The College Board. Still, when data presents conflicting figures (as previously reported in The New York Times) as to the percentage of college graduates outearning those who are without a degree six to 10 years after enrolling in college, it is worth noting that the higher education journey of a student deserves some serious deliberation.