Facing the real world after college is usually an eye-opening experience for young adults, but the prospect of dealing with massive college debt while starting a new future adds stress to many graduates.
The pressure of limiting student debt is also felt among undergraduates.
Derrick Davis, a student at the University of Arkansas at Pine Bluff, took on this challenge after his mother died in his sophomore year. His financial situation changed “drastically and unexpectedly” as a result.
“It’s not easy to fund loans with no relatives and no dependents,” Davis said. “I have to fill it without my mother, work and go to school.”
On Wednesday, President Joe Biden announced a three-part plan to relieve families of college debt.
The first part is to forgive up to $20,000 of debt to Pell Grant recipients with loans held by the U.S. Department of Education and up to $10,000 of debt to those without grants. Pel. These grants are federal aid usually given only to undergraduate students.
Eligible individuals are individuals with qualifying incomes below $125,000 or married couples with incomes below $250,000. The federal student loan payment deferral will be extended one last time until December 31.
The second part is to halve the monthly payments for undergraduate loans and to propose that borrowers who have worked in a non-profit organization, in the military or in the government receive appropriate credit for the cancellation of the ready. The third part is to reduce the cost of a college education by holding schools accountable when they raise prices.
“I believe loan relief is a great opportunity for current and future students to afford and complete their education,” Davis said. “Many students are suffering financially because of situations beyond their control. Loan relief will also relieve stress on parents.”
The White House says the total cost of four-year college education, public and private, has nearly tripled since 1980, even after adjusting for inflation. Pell grants once covered nearly 80% of the cost of a four-year public college degree for students from working families, but now only cover a third, according to the Biden administration.
Research from CollegeBoard and the U.S. Department of Education shows that the cost of college attendance and maximum Pell Grants in 2021 dollars rose from $8,000 in the 1980-81 school year to a peak of about $23,000 during the 2020-2021 school year.
Citing an analysis from the Department of Education, the administration added that the typical undergraduate student with loans now graduates with nearly $25,000 in debt.
Nearly a third of borrowers have debt but don’t have a degree, the White House said, citing Department of Education research. He added that many could not complete their studies because the cost was too high.
For black college loan consumers, the burden is greater. The White House said the typical black borrower who started college in the 1995-96 academic year still owed 95% of their original student debt.
Biden’s plan was good news not only for Davis, but also for his school.
“At UAPB, we work diligently to control the cost of attendance to keep our university accessible and affordable,” said Chancellor Laurence B. Alexander. “With the significant level of scholarship funding we provide each year, UAPB maintains a relatively low average net award.
“We are pleased that President Biden has proposed to provide debt relief to low-income individuals who have had to borrow funds to attend universities and colleges. The proposal is not only intended to help former students and alumni through debt cancellation, but calls for the implementation of a new income-based repayment plan that caps monthly payments at 5% of income for current and future borrowers.”
Alexander also urged Congress and the Biden administration to continue working together to increase the number of Pell Grants for low-income students.
This, he said, will improve their labor market opportunities and boost the country’s “competitiveness”, while reducing the amount of funds needed to borrow.
“Removing some of my debt will help me transition into my career in industrial technology. On behalf of other students who have to self-fund college, it’s a relief as we can take advantage and focus on the college and not worry so much about finances.”