An overview of President Biden’s Plan for Student Loans

President Joe Biden.

On his first day in office, President Joe Biden issued an extension of student loan forbearance; freezing all payment deadlines until September 30 of this year. 

In addition to this several-month pause, Biden has supported canceling $10,000 in federal loan debt per borrower as another form of COVID-19 aid. 

On Jan. 8, David Kamin, deputy director of the National Economic Council, indicated this proposal was still on the table for the presidential cabinet. 

“The challenges we’re facing are unique, and that will require a unique and aggressive response,” Kamin explained.    

While these new orders are very generous, they are not the first piece of legislation intended to offer financial relief to students impacted by the pandemic. 

In March of 2020, Congress approved the CARES Act, which included a temporary suspension of loan payments, set interest rates to 0%, and ceased all collection of defaulted loans. 

Prior to President Biden’s extension, the CARES Act was initially set to expire by Jan. 31. 

While campaigning, Biden promised he would address student loans once he took office.  

These promises involved making tuition at public colleges free for families with an income below $125,000, and investing in universities that offer vital roles in their communities. 

Shortly before taking office, Biden also expressed his desire to improve loan debt policies originally enacted during the Clinton Administrationsuch as the Revised Pay As You Earn (REPAYE) program. 

Biden’s proposed changes would include reducing the minimum payment to 5% of discretionary income instead of 10%, and would make it so that forgiven debt is no longer considered income tax. 

Miguel Cardona, the current Secretary of Education, has addressed the priority of student debt holds for the Biden administration. 

"College is the pathway to continued success and we have to make sure that our students still have access to it and that they're supported in this process," said Cardona in one interview. I would work with our senators and our Congress folks to support a plan that provides some relief for our students in higher education. 

It is expected that the initial extension is only the first of many upcoming reforms and policies concerning American education from the current administration. 

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