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Monday, September 26, 2022
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Students celebrate, weigh consequences of President Biden’s loan forgiveness plan

Students and faculty weigh the effectiveness of Biden’s newest step to reduce student loan burdens

<p>The Biden administration announced its student loan forgiveness plan on Aug. 24.</p>

The Biden administration announced its student loan forgiveness plan on Aug. 24.

UB students and staff were relieved to have their debt burdens reduced following the Biden administration’s August announcement that they would wipe out up to $20,000 of federal loans for “low- to middle-income” earners. But some were concerned about rising tax burdens and national debt figures. 

For UB’s interim Assistant Director of Financial Aid Andrea Reitz, the benefits of loan forgiveness depend on the student at hand.

“Student loans are a good option for students to invest in their higher education,” Reitz said. “I have student loans and the forgiveness will reduce my overall balance. For students, I believe the difference made depends on each individual loan borrower and varies depending on the amount of loan debt a previous borrower had.”

However, for UB alumnus Vinit Patel, who graduated from UB in 2021, the move comes as an unjustified decision.

“When you temporarily forgive student loans for a certain group of people, that will come at the expense of the taxpayers’ money. Many liberals are not understanding the fact that student loan forgiveness is not free of cost,” Patel told The Spectrum via Instagram. “When you forgive up to $20,000 in debt, people will have that extra $20,000 to spend now and they will create supply-demand challenges by spending on cars, goods, and more. This will just make the inflation worse.”

Logistically, an applicant’s adjusted gross income from 2020 or 2021 must be less than $125,000 a year for individuals or less than $250,000 a year for households to qualify for loan forgiveness. Applications will open in early October, according to MSNBC, with approved borrowers expecting relief four to six weeks after applying.

Yet, this timeline is in line with the upcoming midterm elections, scheduled for Nov. 8. 

“This is a wildly stupid move to attract young voters for the midterm elections. It is also unfair for millions of hard working families who either paid off their loans or never took out loans. This is a very unethical move to get young voters' votes,” Patel said.

Only borrowers with federal student loans — about 37 million people  — are eligible for forgiveness. For Pell Grant recipients, up to $20,000 will be excused. $10,000 will be forgiven for all other qualifying students.

The Biden administration announced that the pause on loan repayment will be extended one  “final” time to Dec. 31.

But some students are skeptical of the loan forgiveness plan. Freshman computer science major Michael Beards has mixed feelings on the impact of paying off students’ college debt.

“It’s a good first step. It’s a roundabout way of making college affordable. Maybe they should give funding to schools instead, and then the schools would be able to lower their tuition,” Beards said. “It’s interesting because maybe it’ll add to the national debt and then we’ll be paying it off in taxes for years.”

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For MBA student Alvin George, the debate over loan forgiveness comes down to one’s educational background.

“I think for the people who disagree with loan forgiveness, it’s a jealousy issue,” George said. “A lot of people at my company either had associates degrees or didn’t come [in] with college degrees, so they never viewed college as a necessity, they viewed it as a luxury. Student loans were a matter of you paying for your luxury and now you’re getting a free loan, essentially, so that’s why they don’t find that value.”

Some students were excited for benefits beyond economic relief. Freshman psychology student Olivia Kowalski sees the plan as another step toward making higher education less expensive, or even free.

“Long-term, people would be better educated, and that helps the population as a whole. The better educated people are, the more they’re able to vote on issues — they understand the reasoning behind certain bills and they can think critically,” Kowalski said.

With the Nov. 8 midterm election date coinciding with the first forgiveness application deadline of Nov. 15, student loan forgiveness will be on the forefront of many voters’ minds — both at UB and nationwide.

Ria Gupta is an assistant news/features editor and can be reached at ria.gupta@ubspectrum.com


RIA GUPTA

Ria Gupta is an assistant news/features editor at The Spectrum.

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