URI graduates could have federal student loans partially cancelled
Some students are still paying off their four-year degree 20 years or more after they graduated. Photo from kiplinger.com.
President Joe Biden campaigned on a platform that included progressive changes for higher education, most notably, federal debt relief for student loan borrowers.
Biden campaign officials announced the president’s support for Congress to cancel $10,000 of federal student loan debt per person on Jan. 8 as part of the COVID-19 relief package.
On Feb. 4, Democratic lawmakers introduced a pair of resolutions in the Senate and the House, reiterating a previous call from Senator Chuck Schumer and Senator Elizabeth Warren for Biden to cancel $50,000 in student debt per borrower. House Press Secretary Jen Psaki affirmed Biden’s support for some kind of cancellation, however, she made no promises of an executive order.
Biden signed a $1.9 trillion coronavirus relief package on March 11, including a provision making any student loan debt forgiveness tax-free, starting from Dec. 2020. Previously, any student loan debt canceled by the government was taxable and borrowers were charged at their normal income tax rates. According to this new COVID-19 relief bill, any student debt forgiven will no longer impact a borrower’s tax liability, lasting through 2025.
According to EducationData.org, approximately 42.9 million Americans with federal student loan debt each owe an average of $36,406 in federal loans. At the University of Rhode Island, about 76 percent of students receive some sort of financial aid, according to Director of Enrollment Services Carnell Jones.
“It could be loans, it could be grants, it could be scholarships,” Jones said. “I would say that the majority of the awards we grant, just by the numbers, would probably be more on the needs side.”
According to Jones, URI is in support of providing financial aid and loan forgiveness assistance for current or former students on a need or merit basis. This can also include presidential scholarships, athletic awards, transfer merit scholarships and more.
“If a student is in school, the majority of the times their loans are being paid, the interest is being paid on the loan through their various lenders and through the government,” Jones said. “You’re not technically due for your loans until six months after graduation or separation.”
President Biden’s student loan forgiveness plan will be provided under the Borrower Defense to Repayment program, a student loan forgiveness program that was set up with new regulations by the Obama administration in 2016, according to Forbes.
A report conducted by the National Consumer Law Center this month estimated that two million student loan borrowers have been repaying their debt for more than 20 years, making the Biden administration’s call to Congress life-changing for many.
Dakota Grenier, a recent graduate of URI’s nursing program, said with the challenges 2020 presented to millions of students, debt cancellation would have a major impact on their lives out of college.
“COVID-19 has shaken up our lives in ways we could have never predicted nor prepared for,” she said. “Financial burdens only weigh heavier on young adults during this time. Student loan forgiveness would allow young change-makers to convert their energy into action, rather than into more stress.”