Combatting Rising Education Costs

WILL THE RECENT FEDERAL LOAN RELIEF PLAN EASE CURRENT STUDENTS’ FINANCIAL BURDEN?

A week before Pacific University undergraduate students returned to campus, many prepared to dig deeper into debt (or their families’ pocket-books), President Joe Biden made a surprise announcement: the government is forgiving as much as $20,000 of student debt for millions of federal student loan holders. The Student Loan Relief plan will ease the burden of student debt for many middle- and low-income families in America, at least to some extent.

To make sense of what this means for current students, The Index met with Pacific University’s Director of Financial Aid Leslie Limper.

“I think that [the Biden administration] was not only thoughtful about who they gave the loan forgiveness to, but about fixing some problems that cause students to have trouble paying back their loans,” explained Limper.

She points out that borrowers who make monthly payments on income-based loans will have their interest covered, meaning that the loan will not continue to grow out of control.

Another important change is the reform of the Public Service Loan Forgiveness Program (PSLF). Limper added that “when that program was first started, 90% of the applications were denied. . . and now they’ve made it a lot easier to qualify for that program.” Past and present public servants can retroactively apply eligible time served towards loan forgiveness, and future students can access that program more easily.

But, Limper continued, “there’s always going to be outliers. Particularly people with private loans [which don’t qualify for forgiveness]. I feel sorry about those students taking out loans for this year.”

The news about loan forgiveness has been largely welcomed. For the most part, current Pacific University students with whom The Index spoke rejoiced at this news, but also expressed a desire for fairness.

“If anything, it should be a fair spread,” said Ally, a first-year student who hasn’t taken out loans yet, but surely will. “If you’re going to give some people money back for their college experience, I think that will have to be equal for the future generations.”

A fact sheet released by the Biden administration claims that 87% of the loan relief money will go to borrowers making less than $75,000 per year. But despite the effort to distribute current debt relief equitably, the plan pointedly fails to extend relief to future generations of students. This is particularly troubling for many current students as college costs continue to increase nearly three times faster than inflation.

In 2021, the average graduating debt exceeded $34,000 for Pacific students in undergraduate programs, and over $150,000 for graduate programs, not including debt from their undergraduate studies.

There are alternatives to find relief or additional financial support, like Pell Grants, but those max out at $6,495; not even enough to cover a year of community college in Oregon. Further, the combined income of a Pell Grant recipient’s guardians must be less than $60,000. And while President Biden has proposed doubling the maximum Pell Grant and making community college free, none of that is included in this current plan.

Pacific University junior Vinh said, “I mean for me personally, I’m fortunate enough to not take a loan out. But for my friends, they had to take loans out. I think that it’s nice that [President] Biden took the initiative. He said it at the beginning of his presidency, but we just didn’t see it happening. When it finally happened, I thought it was good to see.”

When asked if he would have changed anything about the plan, Vinh added, “I hope this continues in the future because college is going to get more expensive year after year and access to college for some families is not easy. So I hope that future presidents are able to continue it.”

Echo, a senior, agreed with Vinh: “It was one of the first campaign promises that it seems like [President Biden] actually followed through with. So it made me happy. Personally, I am lucky enough to have a family that’s able to pay for my school. . . so it doesn’t affect me at all. But I have a lot of friends who have debt and have had it for a while, so it’s a great thing.” Echo also hoped the administration’s efforts to address student debt don’t end there: “I think they should take money away from areas that don’t need it as much and create a college fund for lower income and medium income households. . . and I think there should be something set up for people who are like 40 and older who want to go to college. . . because they might not have had [the opportunity] when they were younger.” — Lane Johnson

WHAT DOES THE STUDENT RELIEF PLAN ACTUALLY DO?
●	$10,000 forgiveness for borrowers making less than $125,000.
●	$20,000 forgiveness for borrowers making less than $125,000 and who are Pell Grant recipients.
●	 Federal loan repayment pause extended through Dec. 31, 2022.
●	Federal loan payments made since the March 2020 beginning of the student loan repayment moratorium can be refunded.
●	Monthly loan payment cap reduction from 10% discretionary income to 5%.
●	 Forgive loan balance after 10 years of monthly payments, down from 20 years, for loans of less than $12,000 at time of graduation.