President Joe Biden on Wednesday announced plans to forgive student loan debt for millions of borrowers, drawing support from several Maryland leaders.
Borrowers whose income is less than $125,000 can have up to $10,000 in federal student loans forgiven, or up to $20,000 if they received Pell Grants.
Biden also extended the pause on federal student loan payments through Dec. 31.
Borrowers who have undergraduate loans can cap repayment at 5% of their monthly income. Previously, the minimum was 10%.
Biden acknowledged critics on opposing sides of the issue – those who believe his student loan forgiveness action goes too far and those who believe it does not go far enough.
“I believe my plan is responsible and fair,” he said. “It focuses the benefit on middle class and working families, it helps both current and future borrowers, and it will fix a badly broken system.”
Biden said he will continue fighting to make college more affordable, including doubling Pell Grants. He also said he will work to implement universal pre-kindergarten and universal community college.
“I ran for office to grow the economy from the bottom up and the middle out,” he said, “because when we do that, everybody does better, everybody does well.”
Biden said his announcement is about “opportunity. It’s about giving people a fair shot. It’s about the one word America can be defined by: possibilities.”
Maryland leaders praised Biden’s decision to forgive debt for student loan borrowers.
Maryland House Speaker Adrienne Jones was pleased to see Biden take action on student debt relief.
“Forgiving up to 20k in student loan debt [for Pell Grant recipients] is an important step in easing the financial burden for millions of Americans,” Jones said.
She also pointed student loan borrowers to the Maryland Higher Education Commission to apply for a tax credit to access additional assistance with their student loans.
Democratic gubernatorial nominee Wes Moore called Biden’s announcement “a historic victory for the thousands of Marylanders struggling with student loan debt.”
Moore also pledged to work to reduce student loan debt if elected governor.
“As governor, I’ll continue fighting to prevent students from taking on unnecessary debt by increasing funding for financial aid, making loan debt counseling more accessible, creating a State Student Loan Debt Authority, and expanding the Student Loan Debt Tax Credit,” he said.
U.S. Sen. Chris Van Hollen said the president’s action was “a big step” but that college must be made more affordable so that students do not accrue large debts in the first place.
U.S. Rep. Anthony Brown, who is the Democratic nominee for Maryland attorney general, called Wednesday’s announcement “the most signficant action to reduce the burden of student loan debt in our history.”
U.S. House Speaker Nancy Pelosi, who grew up in Baltimore, said Biden’s “bold action” will alleviate financial burdens for American families, particularly for women and people of color.
“By delivering historic targeted student debt relief to millions of borrowers, more working families will be able to meet their kitchen table needs as they recover from the pandemic,” Pelosi said.
“Guided by [Biden’s] commitment to justice and equity, Democrats are opening the gates of higher education for those who have long been left behind,” she added.
U.S. Rep. Andy Harris, the lone Republican member of Maryland’s congressional delegation, criticized the president’s move to forgive student loan debt.
The Biden administration previously announced it would forgive student loans for public service workers, including teachers, nurses, firefighters, and others. To access the Public Service Loan Forgiveness waiver, borrowers must apply by Oct. 31, 2022.
Last week, the administration announced it would forgive $3.9 billion in federal student loan debt for more than 200,000 former students of ITT Technical Institute, after authorities found ITT Tech defrauded students by misleading them about the value of a degree from their school. Among those affected students nationwide are almost 4,000 in Maryland, with $73 million in student loan debt from ITT Tech.
Have you ever dealt with a business that had one price for you but another if you have insurance? Colleges took full advantage of government loans and upped their tuitions. College is ridiculously unaffordable and I predict, many will start to realize they can do without. Frankly, I think the colleges should chip in far more than the grocers and garage owners, who will be taxed to cover this. BTW, my nephew is looking forward to having his car loan forgiven.