Changes coming to provide relief, make college tuition repayment affordable
Congressman Brian Higgins, D-NY-26, welcomed actions announced by President Joe Biden to cut student debt and lessen the financial burden on Americans pursuing higher education.
Higgins said, “The cost of a college education has risen exponentially in recent years, making it beyond reach for many hard-working families and creating a lifelong financial burden for others. A degree should be accessible to all who wish to pursue a higher education route. By lifting the weight of education debt, people are better positioned to own a home, raise a family, serve their communities, and contribute to a socially and economically successful society.”
Biden announced up to $20,000 in debt relief for Pell-grant eligible students, and up to $10,000 in relief for other eligible borrowers. Families/couples with a household income under $250,000/annually and individuals earning less than $125,000 may qualify. The U.S. Department of Education will be releasing additional details on how to claim the relief, noting that some may qualify automatically. The American Rescue Plan, supported by Higgins, makes changes that allow certain student loan relief to be excluded from gross income.
According to CollegeBoard, “In 2019-20, 55% of bachelor’s degree recipients from public and private nonprofit four-year colleges and universities graduated with debt and had an average debt level of $28,400.”
Higgins said the administration will also extend the pause of student loan repayment, interest, and collections, which began during the pandemic, through Dec. 31, 2022, noting borrowers should plan to resume payments in 2023.
In addition, the U.S. Department of Education plans to create an income-driven repayment plan that caps monthly payments for those with an undergraduate degree at 5% of a borrower’s discretionary income, cutting existing payments in half for many. Details of which will follow the federal rule-making process.
In 2007, Congress created the Public Service Loan Forgiveness (PSLF) program to provide those who work for a minimum of 10 years in public service, including teachers, police, government and not-for profit organization workers, with some student debt relief. Temporary changes to the program, made by the Biden administration, make it easier for workers to apply and qualify.
Higgins’ office has already assisted several Western New Yorkers with the PSLF process and encourages more Western New Yorkers to apply before the Oct. 31 deadline.
In this week’s announcement, Biden indicated plans to build on these temporary changes to continue to make the PSLF program accessible.
According to the Federal Reserve Bank of New York, nearly 2.58 million New Yorkers carried a total of over $49.5 billion in student loan debt at the end of 2021, with New York borrowers having on average over $38,000 in outstanding student loans.