What the Biden Administration Could Mean for Student Loans

Official+White+House+Photo+by+David+Lienemann%2C+courtesy+Wikimedia+Commons

Official White House Photo by David Lienemann, courtesy Wikimedia Commons

John Madden

After a chaotic election, Joe Biden has taken office as the 46th president. Shortly after being sworn in, he signed 15 executive orders, undoing many of President Trump’s policies. With Biden being quick to spring into action, what does this mean for college students?

Biden previously supported and proposed programs throughout his campaign that would allow the forgiveness of student loan debt due to the COVID-19 pandemic. The federal government currently lends $1.4 trillion dollars through the education department to over 42 million borrowers.

Because of COVID-19, there has been a pause on the monthly payments of more than 22 million borrowers for federal student loans. This pause waived interest along with payments through the end of 2020, and the question remains that will such relief will be addressed in 2021. President Trump had previously extended the deadline from Sept. 30 through Dec. 31.

About two weeks after the election, Biden, at a press conference, was once again asked about student loan forgiveness being part of his plan in the upcoming administration, and whether or not executive action could take place in order to do so. Biden responded, “It does figure into my plan, it should happen immediately.”

Inauguration Day has come and gone, and the president has since passed a series of executive orders, ranging from masks mandates to rejoining the Paris Climate Agreement, however, student loan forgiveness has yet to be addressed.

It is still very much on the table as Biden does have strong support in Congress, including Senators Chuck Schumer and Elizabeth Warren, both have called for the forgiveness of up to $50,000 per borrower due to the impact of the pandemic.

While Biden has never publicly supported this figure, he has stated on his Twitter that a minimum of $10,000 per borrower is very reasonable. One of his previous Tweets, that is keeping students hopeful, dating back to March 2020, said, “No bill should pass without immediate, generous relief for workers who are losing jobs and hours, small businesses losing revenue, and communities facing emergency needs.”

There are roughly 8.5 million students utilizing monthly payment plans to help offset struggling with debt, in which their payments are directly linked to how much they earn. This has the potential to leave students vulnerable who don’t have both the earnings or savings to afford such payments.

Another generous plan that has been proposed by Biden is in which individuals that are earning less than $25,000 out of college are not required to make payments on their loans, and are also exempt of interest.

Overwhelmingly, there are a majority of Americans who are in favor of some form of student loan debt removal/forgiveness. A poll from Vox and Data For Progress shows that over half of those who voted are in favor of cancelling $50,000 in debt for each borrower.

An executive order would allow Biden to take immediate action and provide instant relief to students who have been affected through COVID-19. However, such action may be taken through legislation instead, in order to provide a more permanent solution.