Jacqueline Flores | Staff writer
President Biden’s loan forgiveness plan is the relief that millions of Americans need as debt burdens individuals and families across the nation. Students can finally take a breather as we get closer to fixing the student debt crisis.
The $1.75 trillion student loan debt is a large burden on many households.
I struggle financially as a long-time student, especially after deciding that I’d come back to school for a second degree. My dreams of becoming a stress-free student dwindled once I realized I still work to pay my current auto loans, credit loans and student loans.
Even before the pandemic, former college students — now working adults — have spent years struggling to pay back their loans. Existing forgiveness programs only aid people in public service or in rare situations and barely help students.
College costs increased 31.4% in the span of ten years from 2010 to 2020. With increased costs, loan borrowing becomes more common to cover expenses.
Forgiving student debt sounds unrealistic, but it’s possible when one creditor is in charge of the majority of the more than trillion-dollar student debt — The Free Application for Federal Student Aid.
FAFSA is under the U.S Department of Education and holds the majority of this debt as most students use FAFSA for college. Therefore, they should be the ones responsible for paying off the loan debt. According to Biden, cumulative deficit reduction will help pay off the loans, which decreases the country’s overall debt.
The only other option for loan forgiveness is a more complicated program. The Public Service Loan Forgiveness, or PSLF, is difficult to apply for and unreliable because several applications remain unprocessed. Other cancellations are based on special circumstances.
The majority of applicants get rejected due to their extensive policies, as the requirements for eligibility are only for public service workers who’ve worked in the field for 10 years with 120 on-time payments.
This means that there are limited options available for financial aid. But not many qualify and those who apply get rejected because of their complex list of requirements.
Student loans hurt graduates of a minority ethnic background, especially those coming from low-income backgrounds, who face the biggest struggle to pay them off.
These students borrow more loans than those who are white. Interest rates and graduate school loans leave Black students with twice as much debt as white graduates. They have fewer financial resources available to them when they first enroll, causing them to rely on loans.
Forgiveness would aid financially stressed Black and Hispanic students who took out loans.
Perhaps forgiving debt may disrupt the federal loan system. After all, debt can’t just be easily forgiven or people would constantly abuse creditors to forgive their mortgages and auto loans.
People do need to be held responsible for their personal economic choice. However, with most college and graduate school tuition prices, most people have no choice but to take out a loan.
This is because there’s a generation of Americans making major life decisions differently because of their student loans. They’re less likely to take out other types of loans, such as opening a business or financing a home.
Students with outstanding loans were 36% less likely to purchase a house, as well as car loans. Their credit scores are so bad that they’ve resorted to living with their parents until they’re able to get back on their feet.
If debt gets lifted, then people with pent-up desires will spend more, affecting the economy positively.
Having $10,000 in loans forgiven per student will be an immense pressure off our chests. Graduates no longer have to slave at jobs to be able to pay for them and can focus on the careers they worked hard for.
The student forgiveness plan may not be an immediate solution, but it’s a step in the right direction. Students deserve accessible education and guaranteed futures.
It’s fair to those former students who’ve already paid their loans. If they were able to pay for it, then that would mean that they had resources available to them, something that middle to lower-income graduates doesn’t necessarily have.
While it may be a temporary band-aid because the next generation of students will probably take out loans for their education, this will most definitely be a step towards future reforms.
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