Examining Biden’s student debt alleviation plan: Hopes and Doubts
and Sara Javerbaum, A&E Editor
In a decisive move to confront the mounting student loan crisis, in the summer of 2023, President Joe Biden announced a plan to alleviate the financial burdens facing current students and recent graduates alike. The student debt crisis has only been compounded in the past decades due to tuition costs outpacing wage increases, leading to more students taking loans and falling deeper into debt. Biden’s plan's focal points include a revamp of income-driven repayment (IDR) programs, an expansion of loan forgiveness initiatives, and a proposal to cap federal student loan interest rates. On Oct.4, Biden also approved nine billion dollars in student debt relief, further pushing to reduce the burden of student debt.
Audrey Strauss / The Samohi
The centerpiece of Biden’s proposal is a comprehensive overhaul of IDR programs, with a focus on broadening access and simplifying the process for students around the world. From lowering monthly payments linked to income levels, to extending the reach of the Public Service Loan Forgiveness (PSLF) program and a new forgiveness program for those with a debt relatively higher than their income, Biden’s plan aims to make college education more accessible and less financially damaging long-term.
Addressing the compounding interest predicament, the plan introduces a cap on federal student loan interest rates. This safeguard is envisioned to prevent the exacerbation of debt burdens, creating better financial predictability for students post-grad.
While the plan has been applauded for its ambitious goals, many argue that it fails to address and acknowledge the root causes of the student loan crisis. Doubts on whether the plan equitably considers individuals whose savings and general financial situations were damaged through COVID-19, and whether the interest rate regulation and forgiveness initiatives are sufficient for low-income individuals have been voiced as well.
Even with these uncertainties, current students and recent graduates still stand to benefit significantly from these proposed changes. However, the rollout of Biden’s new plan also intends to help future generations to come. For high school students, this means a potential future where the dream of attending college doesn't come with crippling anxiety about mountains of debt. The promise of lower monthly payments and expanded loan forgiveness initiatives is intriguing, and if successful, could be a genuine lifeline for tens of millions of Americans.