OKLAHOMA CITY (KFOR) — President Joe Biden announced his student loan forgiveness plan today, fulfilling one of his campaign promises. The president says relief is essential with the cost of a public 4-year college degree tripling in the past four years.
Biden posted on Twitter saying he’s keeping his campaign promise with a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
Those who have undergraduate loans can cap repayment at five percent of their monthly income. This will provide $10,000 in debt cancellation for millions of Americans with an annual income of $125,000 or less. The student loan forgiveness will also apply to couples who file taxes together and make $250,000 or less a year. Pell Grant recipients will be eligible for an additional $10,000 in debt relief, for a total of $20,000.
“It’s true in politics and it’s true in budgeting. If the government decides that they’re going to forgive the student loans for a large group of students, that’s wonderful for that group of students. But then taxpayers at large would also, you know, carry that burden forward,” said Greg Burge, economist professor and department chair of economics at University of Oklahoma.
A recent University of Tulsa graduate welcomes the help with his monthly student loan payments.
“This is going to take a pretty decent chunk out of it’s not going to eliminate it. I’m not going to be out of the hot water yet, but it’s going to take a chunk out of it,” said Max Gruenwald, recent University of Tulsa graduate.
Gruenwald says this would make a difference for him.
“A lot of it was online. I was at home paying for college for most of it. And so getting any amount of help with the debt I’ve accrued for that is a tremendous help,” said Gruenwald.
One University of Oklahoma student we talked with says his parents took out the loans, but they won’t qualify for help.
“We’re kind of in that middle zone where it is not affordable, but it’s also not completely unaffordable. So, we’re in this spot where we can afford it, but also, we can’t. We’re not like super struggling… And like my dad, who worked himself out of poverty is going to have to spend all this money that he’s worked up his entire life on me to go to college.” said Ty Vizenor, University of Oklahoma student.
Vizenor says he thinks there are several ways the debt forgiveness could feel unfair, including those who chose not to take on student debt at all.
“It’s kind of selfish, but, you know, it is a little frustrating because it’s like you’re looking at people who’ve got a ton of money… and they’re going to they’re going to go to pay for it. And then the people on the bottom are going to pay for it. But all the people in the middle still have to deal with it,” said Vizenor.
Student loan borrowers qualify based on their income in either the 2020 or 2021 tax year.
The payment pause on federal student loans will be extended through the end of this year.