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Thursday, September 8, 2022 Vol. 76 No. 3
Biden announces student loan forgiveness up to $20,000 BRANDON WELLS sports editor
Among last week’s events, one stood out for college students — student loan forgiveness. President Biden announced recently the White House’s Student Debt Relief Plan. In this plan, the Department of Education would be forgiving up to $20,000 in student loan debt from federal loans. The eligibility for this forgiveness is dependent solely on you or your parents’ income. Ken Moffett, chair of the Department of Political Science, said this loan forgiveness is based on amounts less than $150,000 for individual income or less than $250,000 combined for families. When meeting these requirements, Moffett also said forgiveness amounts can vary from $10,000 for non-Pell Grant recipients with federally backed loans and $20,000 for Pell Grant recipients. Those who borrowed using a federal Parent PLUS loan are also eligible for forgiveness given they meet the income requirements. Moffett said that those who consolidated their Federal Family Education Loans into federally backed programs are eligible as well. According to an article from CNN, some current students are eligible, and this eligibility is based in a similar way to FAFSA, meaning it will be based on your income if you file individually, or your parental income if you are filed as a dependent. Moffett also said support for this action is partially based on its ability to give many students a more balanced student
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loan debt level. “On average, non-white borrowers for undergraduate student loan debt have higher levels of student loan debt than white borrowers,” Moffett said. “So, accordingly, this is also framed by advocates of this proposal as a way of advancing equity.” On top of the forgiveness, Biden also extended the pause for debt repayment to end on Dec. 31, 2022 and announced a new income-based repayment plan for loans. The plan would introduce a more affordable way for borrowers to repay their debt by basing monthly payments off of your discretionary income — allowing lower payments, and for some, no payments. Emily Blackston, a junior psychology major from Springfield, Illinois, said she saw the forgiveness coming for some time, but pictured a larger amount. “I thought it was gonna be more than $20,000, and $20,000 seems to me like [it’s] about the maximum forgiveness,” Blackston said. Blackston said she is eligible for this forgiveness, but is dissatisfied due to having to still take on the full price of getting a master’s degree for psychology. She said despite this, she is still hopeful she can find employment that will pay for her doctorate. “Grad school is definitely super expensive. The whole idea is it’s supposed to be a payoff, so you’re going to be in debt after, but ideally you’re going to have a job
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that will allow you to climb out of that hole,” Blackston said. “As far as a degree beyond [a master’s] goes, I think I might be able to get that covered. It depends on where I get into.” With future forgiveness possibly far off, Blackston said she is unsure whether she has faith that more will be done or whether it can be done.
The forgiveness itself only covers federally backed loans, meaning not all students will have their loans forgiven, even if they’ve graduated. Koren Frideres, a Spring 2022 graduate majoring in English from Coal City, Illinois, said since her loans are all private, those loans are still fully on her. “I was complacent to it because I kind of knew that my loan was probably not going to be touched. I have a private loan with Sallie Mae,” Frideres said. Despite it not directly affecting her loans, Frideres said she sees a lot of pushback regarding the move to forgive loans due to uncertainty of where the money is
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coming from. “The money has to get paid back somehow, and I can’t perceive that going well if they tried to [implement] a tax or something like that,” Frideres said. With that being said, the topic of how the loans will actually be paid back is heavily debated. According to an article from CNBC, the topic of burdening taxpayers is a fair argument to be made, with estimates of a $2,500 burden per taxpayer. While this doesn’t directly mean that taxpayers will immediately see that cost, there will eventually be some sort of cost to make up for the size of the student loan forgiveness. On the other hand, some states are able to tax the loan forgiveness at the state level. According to an article from PBS, states such as Mississippi, Minnesota, Wisconsin, Arkansas and North Carolina will tax the loan forgiveness due to state laws regarding loan forgiveness. Moffett said this taxing is primarily due to the differences between state laws and tax codes, with some having the same or similar laws and some having different ones. “Each state writes its own tax code… Different states write their tax codes in very different ways,” Moffett said. “For example, the state of Connecticut taxes people who are employed by Connecticut companies but are working remotely elsewhere unless they can show that it’s being done for other than the convenience of the employer. This is known as the convenience of the employer rule.”
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