EXPLAINER: How Biden Administration’s student loan help plan will work
NASHVILLE, Tenn. (WSMV) - According to White House sources President Biden is expected to announce Wednesday his long-delayed move to forgive the $10,000 in federal student loans for many Americans and extend a pause on payments to January.
The announcement comes just one week before the pause on federal student loan payments expires. Molly Johnson told us she has been paying off her student loans since 2017 and would qualify for the relief.
“I’m interested just to see what happens,” said Johnson. “With them being on hold during a lot of the pandemic, that’s been really helpful in not just having to pay those monthly bills has been helpful.”
White House sources said President Joe Biden is also considering canceling up to $10,000 of Americans’ student loan debt for each borrower that makes less than $125,000. Johnson said an extra $10,000 to go towards her debt would be helpful too if the Biden Administration canceled portions of her debt.
“We need student loan forgiveness beyond the potential $10,000 your administration has proposed. We need at least a $50,000 minimum. What will you do to make that happen?”
Although loan forgiveness would be beneficial for most, experts told us that this could have an impact on inflation. However, Marc Goldwein, Senior Vice President and Senior Policy Director of the Committee for a Responsible Federal Budget, told us that a more targeted approach to helping with student loan debt might help Americans overcome loan debt.
“A more targeted approach would focus on income-driven payments and college affordability in the first place,” Goldwein said. “That means pushing colleges to accept more AP credits and transfers from community colleges, more no-frills degrees, cutting out administrative waste. We need to make college affordable, not send a $10,000 gift to people that already have, in many cases, already advanced degrees.”
Making college affordable is something that college students like Demari Spencer, a Tennessee State University freshman, agrees with since some of his scholarships cannot cover the entire bill.
“If Biden got rid of student loan debt for now and the future, it would have a lot more students come to college instead of trying to find a different route than not going to college, which in turn helps everyone,” he told us.
In addition to President Biden’s announcement, sources say White House officials are also looking into offering additional forgiveness for some borrowers.
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