Student Loan Debt Solutions for Biden’s First 100 Days

President-elect Joe Biden will be sworn in as the 46th President of the United States on January 20, 2021.

Biden, like those who came before him, will set an aggressive schedule for the first 100 days. In that window, he will seek to accomplish at least one historic achievement to temporarily satisfy the toughest employer out there – the American voter.

This achievement is very likely to come in the form of a policy aimed at addressing the worsening student debt crisis in the country.

Why?

First, take a look at the numbers. The country has a student loan debt balance of $ 1.7 trillion, making it the second largest form of consumer debt behind mortgages.


According to EDU loan, the average borrower of a student loan from the 2019 class must $ 29,076 in student loan debt. In Connecticut, the average borrower in this category owes $ 41,579, the highest figure in the country.

How are these young Americans going to move forward after college with such a financial burden?

Second, it is an issue that is taken seriously by members of both parties. Remember, it was President Donald Trump who signed an executive order in August to maintain abstention from the student loan pandemic.

And recently, its Education Secretary, Betsy DeVos, extended the relief until January to leave the incoming administration to take the next step.

The vast majority of young voters, of whom there are many, are in student loan debt and neither party wants to alienate this electoral bloc by having the more severe student loan debt platform.

This means President-elect Biden will likely have his best chance of securing a meaningful 100-day political victory with bipartisan student loan debt reform. He can get something through the legislative bodies and the Resolute Desk within the short time frame of 100 days.

But, it must make sense. Forgiving the $ 1.7 trillion in student loan debt doesn’t just make little sense, it’s truly unfair to anyone who has worked hard to pay off their own student loans.

Here are some bipartisan student debt solutions President-elect Biden can consider.

First, the pandemic student loan forbearance for all federal student loans is expected to be extended until January 2022.

Even with a vaccine in the works, pandemic and social distancing guidelines will likely still have an impact on our lives until the spring, which means the economic recovery will continue to be excruciatingly slow for many unemployed Americans.

This recession is not going anywhere anytime soon, so struggling student loan borrowers will continue to need the financial reprieve that pandemic forbearance offers them.

On top of that, borrowers who have been able to keep paying off their student loans are quickly reducing their debt balances because with interest rates frozen to zero, 100% of payments go to the principal.

Second, all federal student loans that were used to pay for college fees related to the 2020 spring semester should be completely canceled.

When campuses across the country were closed to combat the spread of the virus, students were deprived of the full university experience for which they had taken out federal loans.

They did not have access to state-of-the-art facilities and world-class educators. Instead, they took Zoom courses online from their beds and kitchen tables. Their tuition fees for this semester should more accurately reflect the latter, not the former.

By forgiving federal student loans taken out for this semester only, President-elect Biden can do the right thing for these students because their loan balances will be more in line with the educational value they received.

Third, at the root of the student debt crisis, colleges and universities must finally be held accountable by the federal government.

When a student has federal student loan debt, they don’t owe the school money, they owe the government money because the government has already paid for the school. The same goes for private student loans, except the government is swapped for a private lender.

This system gave us the student loan debt crisis because colleges were able to raise tuition fees to outrageous levels without fear of not getting paid. Students must then incur more and more student debt to meet these obscene tuition fees.

So the government and students are left behind, while colleges and universities fuel these endowments.

If the system is to remain, a government accountability system must be created where colleges and universities are punished if they develop a history of high student debt and default rates.

One form of punishment imposed on schools by the government would be forcing the institutions concerned to become equal repayment partners with borrowers who have taken out student loans to attend these schools. If they don’t comply, the federal government can simply freeze funding for these schools or even not provide federal student loans for students to attend these schools.

It’s my prediction that colleges and universities would quickly drop tuition fees to avoid high debts and defaults if President-elect Biden signed such a policy within the first 100 days.

Michael Brown is the Director of Communications at EDU loan. He can be reached at [email protected]

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