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Biden Debt plan is welcome help
We’re generally supportive of President Joe Biden’s plan to relieve or reduce college loan debt for millions of Americans, including hundreds of thousands of Iowans who owe billions in student debt.
Under the plan, debtors who earn less than $125,000 in tax years 2020 or 2021 tax years could receive $10,000 in debt relief. Students from low-income families who received Pell Grants are eligible for $20,000 in debt forgiveness. Of the 43 million Americans who owe college debt, the plan would wipe out debt for 20 million people.
The income threshold may seem high to Iowans, but the Department of Education reports that nearly 90 percent of the debt relief would go to people earning less than $75,000.
We’ve advocated for student debt relief in the past, and would like to see the state of Iowa explore more options to pay down debt in an effort to attract students in categories within the state’s workforce reeling from a shortage of workers.
We agree the Biden plan’s price tag, around $500 billion, is large. But debt relief could allow millions of Americans stop paying for student debt and start making plans for their long-term financial security. The economic payoff could far outweigh the shocking sticker price.
It’s not a magic bullet, and we do have reservations about the plan. We understand the risk that the plan could actually lead to tuition increases. Its biggest flaw is that while relieving debt, it does little or nothing to address skyrocketing tuition costs and a system that encourages students to take on large amounts of debt they will struggle to pay back. A large chunk of unpaid debt came in the form of small loans to pay for an education at for-profit colleges.
In Iowa, we’ve seen a steady decline in public support for state universities, leaving rising tuition payments to cover more and more of university operations. University budgets have been stiffed in recent years by a Republican Legislature resistant to increasing state higher education funding. Lawmakers must rethink this approach in the name of families struggling to afford education costs.
Biden’s plan will mean welcome relief for millions. But the problems that pushed them into crippling debt remain. This is a job for Congress and state lawmakers. Ignoring it will be unforgivable.
(319) 398-8262; editorial@thegazette.com
FILE - President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, Aug. 24, 2022, in Washington. One in four Black borrowers would see their debt cleared entirely under the administration’s plan, which cancels $10,000 in federal student loan debt for those with incomes below $125,000 a year, or households that earn less than $250,000. The plan includes an additional $10,000 in relief for Pell Grant recipients, who are more than twice as likely to be Black. (AP Photo/Evan Vucci, File)
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