The Biden administration is canceling student loans for another 160,000 borrowers through a combination of existing programs.
The Education Department announced the latest round of cancellation on Wednesday, saying it will erase $7.7 billion in federal student loans. With the latest action, the administration said it has canceled $167 billion in student debt for nearly 5 million Americans through several programs.
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The latest relief will go to borrowers in three categories who hit certain milestones that make them eligible for cancellation. It will go to 54,000 borrowers who are enrolled in Biden’s new income-driven repayment plan, along with 39,000 enrolled in earlier income-driven plans, and about 67,000 who are eligible through the Public Service Loan Forgiveness program.
Without some sort of long term strategy, it may not be.
I’ve always said this would be good if also paired with some moves to improve things longer term, because random infusions of lots of free money without any checks on the university side has already worked to make the education more outrageously expensive. Continuing the strategy without any sort of price management will make things work.
Same could be said of healthcare, if as much money as they ask for is provided to the pharmas and hospitals, they will ask for more and more. Relief must be paired with some sort of plan to mitigate that.
You can treat symptoms and then address longer term problems when able. It’s not like it would be better for these people just to keep paying because the current divided Congress won’t address the core problem.
As long as you address the root problem in the window of time before things get worse from this cash infusion. And to be honest, I don’t have much confidence in that happening.
I don’t think the US university system is going to rework their fees because 160,000 people got public-service or low-income related forgiveness. It’s not even giving money directly to schools or financial institutions. The worst case is people who plan to either be poor or do public service may be less cost conscious when applying to schools, but the PSLF and income-based payment programs already existed and more importantly 18 year olds are just completely clueless about what taking out a $100,000 loan means. People fetishize economics like it’s a perfect mathematical system where every dollar spent will yield results in some other part of the system while just outright ignoring all the complete irrationality that exists in consumer decisions.
But it is paired with other measures? The original full package would not charge interest for anyone making payments, for example.
