The Biden-Harris administration announced a student loan debt relief program in August 2022. According to the White House website, borrowers are eligible to receive up to $10,000 in federal student loan debt cancellation if their individual income is less than $125,000; Pell Grant recipients can receive up to $20,000. The website also specifies that students who are dependents will be eligible for relief based on their parents’ income rather than their own. Occidental College Director of Financial Aid Sheryl Reinschmidt said a large number of current students and alumni will be affected by this plan.
Reinschmidt said that for the 2021-22 academic year, 16.8 percent of Occidental students received Federal Pell Grants and 39 percent of Occidental students had federal student loans. Reinschmidt said these numbers come from data the college collects each year from the students enrolled. Reinschmidt said the Financial Aid Office only maintains records of loans taken out by students who are attending or attended Occidental, and does not have information about the loans that faculty and staff members may have taken out.
“We don’t have numbers on how many faculty and staff members will be impacted, but I am sure many are,” Reinschmidt said.
Professor Claire Crawford from the Critical Theory & Social Justice department said she applied for the program to cover some of the loans she took out to pay for her undergraduate and graduate degrees. Crawford said while the debt relief plan only covers about six percent of her total student loan debt, it still makes a difference to Crawford and to her students. She said that debt is tied to the college experience, and that students often express an urgency to focus their experience and not waste time in college as debt mounts.
“There’s this pressure that debt puts on how you experience college, which I feel is very real,” Crawford said. “It’s this idea of, ‘I’m going into debt, so I want to make sure I’m getting the most out of it.’”
Crawford said she has had students complain about their student loan debt, and is aware of how present debt is in college life.
“I do get that comment from students,” Crawford said, “It definitely changes the way they experience going to university because they know they’ll have to pay for it eventually.”
Economics professor Kevin Williams said that while the relief program benefits all current and former students burdened by loan debt, those who never received a degree are the group most impacted by the program.
“People most burdened by student debt are people who never graduated from college. Someone who takes out a loan for their first year of college and drops out doesn’t have the degree to show for it and doesn’t get the benefit of having graduated college on the labor market side,” Williams said. “But they still have this debt following them around. In addition to that, they missed out on a year of working.”
Williams said that while the amount of debt canceled may not seem significant, the program has the potential to impact a large number of debt holders.
According to The White House, the Biden Administration expects that of the over 40 million eligible borrowers, nearly 20 million borrowers could see their entire remaining balances discharged — thus eliminating the debt of about half of the borrowers.
The fate of the program is uncertain given the ruling of a judge in Texas who found the student loan debt relief plan to be unlawful. The federal government has appealed the decision, which sends the case to the Fifth Circuit Court of Appeals. It is unknown when a final decision will be made, and until that time applications for the relief plan have closed.
Wren Andres (junior) said he had planned on applying for the program prior to the judge’s ruling.
“That ruling is the reason I did not apply. I was going to and planning to, but then I saw that they had stopped accepting applications and at that point I couldn’t apply,” Andres said.
Williams said one of the major impacts of the student debt relief plan has been the conversations it has sparked around the federal government’s role in debt relief and the increasing costs of higher education.
“Higher education has gotten much more expensive, and working your way through college is not really feasible anymore. But we have still been financing college and doing debt as if that weren’t the case,” Williams said, “So I think debt relief has brought to the forefront the cost of [higher education] overall and the changing dynamics of investing in college.”
Contact Eliza Kirk at firstname.lastname@example.org