President Joe Biden just gave us another headline that’s sure to spark debate among student loan activists everywhere. Just days after student loan payments came roaring back to life for the first time in three years, Biden’s administration has now approved a hefty $9 billion in student debt relief. The big question? Is it enough?
The new relief aims to unburden 125,000 borrowers, thanks to some overdue “tweaks” in the Education Department’s systems. This includes the Public Service Loan Forgiveness (PSLF) and the income-driven repayment (IDR) programs. Also, those with disabilities are set to receive a chunk of this relief.
The White House chimes in, “President Biden has long believed that college should be a ticket to the middle class, not a burden that weighs on families.” They’re reminding everyone that since stepping into office, Biden’s been on a mission to repair the student loan system, hoping to make college more reachable and less financially crushing.
Here’s how the $9 billion breaks down:
- Almost $2.8 billion will be for the 51,000 folks under IDR.
- A generous $5.2 billion is set aside for the 53,000 under PSLF.
- For the nearly 22,000 borrowers with disabilities, there’s $1.2 billion awaiting them.
Sounds promising, right? But here’s where things get sticky. Debt activists and advocacy groups aren’t exactly throwing a party. The Debt Collective gave it to us straight, calling this relief basically “nickels and dimes” in the face of the colossal student loan crisis. They went on to stress that Biden could (and should) eliminate student debt on a much grander scale.
Braxton Brewington from the Debt Collective echoes the sentiment, urging Biden to turn up the volume on relief efforts, “Biden needs to move much faster on his attempts to deliver relief — and the overall amount needs to rise to the trillions, not just the billions.”
The truth is, that the resumption of student loan payments has put many in a financial chokehold. A recent poll from Morgan Stanley highlighted the bleak reality, revealing that only 29% of student debtors felt “confident” about handling their payments without having to sacrifice other essentials.
With the pandemic’s aftershocks still evident and the nation wrestling with increasing poverty and inequality, many are feeling the pinch. The Debt Collective even tried to persuade Biden to hit pause on student loan payments again, especially with the ever-looming threat of a government shutdown.
While the shutdown was (thankfully) narrowly avoided this time, the ongoing uncertainty about the government’s financial stability and leadership raises more concerns about the future of student debt.
