The White House Has A New Plan to Tackle America’s Student Loan Crisis

President Joe Biden has announced a significant proposal aimed at addressing the student loan crisis by introducing targeted debt relief for millions of Americans across five specific borrower groups.

Campaign Promises 

If we look back on U.S. President Joe Biden’s campaign for office, we’ll see that a consistent promise he made was to address the massive student loan crisis burdening almost one in five Americans.

This past week, Biden has finally taken a massive step in fulfilling his campaign promises to help the millions of Americans struggling with student debt by introducing a new proposal to take effect before the upcoming election.

Plan B

Biden’s revised “Plan B” comes after the conservative-leaning majority Supreme Court rejected an initial proposal, which sought to cancel up to $20,000 of debt for certain individuals.

This new plan distinguishes itself from the original by focusing on relief for individuals in five specific groups of borrowers.

The first and largest group to receive debt forgiveness will be people whose interest in their student debt has increased so much that they now owe more than they originally borrowed.

Cancelling $20,000 in Interest

For people whose debt now exceeds what they borrowed in student loans, Biden’s new plan will cancel up to $20,000 in interest and try to prioritize these funds for low—and middle-income individuals enrolled in income-driven repayment plans.

The U.S. Education Department estimates that this $20,000 relief could apply to 25 million Americans, with 23 million seeing their interest completely erased.

Further Forgiveness

The plan will also include automatic cancellation for borrowers eligible for existing forgiveness programs and debt relief for students affected by fraudulent educational institutions.

There will also be a consideration for those who have been repaying their loans for an extended period of time, such as undergraduates who have had debt for over two decades and graduate students with more than 25 years of debt.

The proposal will also establish a system for borrowers to apply for cancellation due to financial hardship and potentially provide automatic forgiveness for individuals at risk of default.

Easly as this Fall

Utilizing a multi-step rule-making process by the education department, the Biden administration aims to begin implementing some debt relief measures as early as this fall.

However, there is still a chance that the plan could pass and still not come into effect after the election due to legal challenges and the required public comment period.

Experts are already expecting several legal challenges to arise, especially from conservative groups who argue the plan does not address the root issues of an expensive college education.

Degrees Losing Value

Over the past twenty years, college tuition has steadily increased by 40%, yet the actual value of a college degree has only lessened due to an increasing number of young Americans seeking higher education.

20 years ago, college degrees were far less common and could potentially set you apart from other candidates, but now so many people are going to college, it doesn’t make that much of a difference anymore. 

Even though degrees seem to be losing value, colleges are still consistently raising prices for students. Addressing this issue could be a better use of resources than simply forgiving debt that will likely come back even greater in just a few years.

The Sinking Ship

If we want to take a conservative lens at the situation, Biden’s new plan is like being on a sinking ship and throwing buckets and buckets of water overboard while making no effort actually to fix the leak itself.

However, it should also be mentioned that while conservatives are quick to point out how Biden’s plan does not solve the real issue, they are simply critiquing Biden’s plan without providing a possible solution.

Letting the Young Suffer

Conservative groups have also spoken out against student debt relief, saying that it could be seen as unfair to those who have already repaid their loans or did not attend college.

However, the idea that older generations have suffered and, therefore, the younger generation should have to experience those same hardships is an idea that conservative groups receive a great deal of criticism for as it lets problems in America continue to fester.