By Badru Haneefah Moturayo
The concept of student loans is not alien to the American tertiary education system. An average American undergraduate or postgraduate student either owes a student loan or knows someone who does. A student loan is a financial assistance rendered to a student in post-secondary education to cover tuition and related expenses, including books, supplies, and living costs.
Obtaining student loans is a common practice in the United States tertiary education system, as 25-75% of the population are middle-income earners. More than 45 million borrowers in the U.S. have $1.6 trillion in federal student loan debt.
Student loans in the United States have been a century-old menace that has plagued a large percentage of the population across race and religious strata or political ideology. As long as you sought education and were middle or lower class, you probably owed the government some money.
An average American owes $31,000 in federal student loans, an amount that accrues interest daily. Most Americans die still owing the government.
As part of the campaign promises of the Biden-Harris administration, on August 24, 2022, Joe Biden announced a three-part plan to cancel $10,000 of student debt for low-middle income borrowers.
The president announced that the Department of Education would provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients.
He also proposed a new income-driven repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income—half of the rate borrowers must pay now under most existing plans.
The president, who is a staunch advocate for free education, championed the largest increase in Pell Grants in over a decade and promised to double down.
US President Joe Biden and Vice President Kamala Harris
These announcements were met with mixed reactions. We had the doubting Thomases, the hopefuls, and those who were ready to pull their hair out.
Some conservatives were ready to go off the deep end at the announcement of the Biden three-part plan. The plan was deemed “an illegal abuse of power.” They argued that the president had no power to forgive hundreds of billions of dollars in student loans.
Legal opposition to the plan soon became a team effort as various lawsuits started flying in from all over the country.
In the latest, a federal judge in Texas ruled that President Joe Biden’s plan to cancel hundreds of billions of dollars in student loans was unlawful and must be vacated.
Undeterred by the opposition, on November 19, the Biden-Harris administration began sending emails notifying approved student loan applicants. The White House had previously announced that about 26 million Americans applied for student loan forgiveness, and the U.S. Department of Education approved requests from 16 million.
The mail further explained that the approval couldn’t take effect immediately due to the numerous lawsuits which were considered “meritless.” It assured applicants of the discharge of approved debts upon court victory.
The big question is, will the Biden-Harris administration bury this century-old menace, or will the program be eroded by a barrage of lawsuits?
Stay tuned to find out.
Badru Haneefah Moturayo writes for Eko Hot Blog. This media platform reserves all rights to this article.
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