President Joe Biden announced Wednesday a one-time cancellation of a portion of federal student loan debt. The new policy erases up to $20,000 for people who went to college on Pell Grants and $10,000 for those who didn’t — only if they’re making less than $125,000 per year.
Some Oregon students are appreciative of the move but think the president could have gone further.
According to 2019-20 school year data from Oregon’s Higher Education Coordinating Commission, or HECC, people who graduated with associate or bachelor’s degrees from Oregon’s public universities have an average of roughly $21,000 in federal loan debt. At community colleges, former students owe about $13,000 on their federal loans. Overall, 31% of Oregon undergraduates have federal loans, according to the Oregon HECC.
“I am thrilled for the mobility and relief this decision will bring to student debt holders in Oregon and across the country,” Luda Isakharov, the University of Oregon’s student body president, said in a statement to OPB. “However, a one-time cancellation is the bare minimum in addressing the skyrocketing costs of a college education.”
Isakharov is from Oregon, and she said she chose to go to UO because the in-state tuition made it more affordable.
“But, a lot of my friends and peers come to Oregon for programs from out-of-state, and the costs are extremely burdensome, and as a result they have to take on extremely large amounts of loans,” she said. “I just wish we could all choose our college, universities and educational paths based on our passions and the best fit for us and not be restrained by burdensome costs.”
Student leaders over at Oregon State University, Oregon’s largest public university, had a similar mixed reaction to Biden’s announcement. The Associated Students of Oregon State University said in a statement from its executive branch that while the partial loan cancellation will benefit many students, it’s not a permanent solution.
“While we wish for greater action from the federal government on the student debt crisis, we are pleased to hear that action is being taken,” ASOSU’s executive branch wrote. “We are hopeful that this represents a first step towards longer-term actions to combat the dramatically rising costs of higher education.”
Oregon politicians reacted positively to Biden’s announcement Wednesday.
Rep. Suzanne Bonamici, D-Ore., and U.S. Sens. Ron Wyden and Jeff Merkley, both Democrats, put out statements Wednesday morning in support of the president’s action.
Bonamici called the announcement “the most far-reaching in a long list of actions taken by the Biden administration to support student borrowers, reform the federal student loan system, and make our nation’s colleges and universities more affordable.”
Wyden tweeted that the one-time loan forgiveness is great news for students who are forced to make decisions between paying off their loans and making ends meet. He said he’ll continue to push for student debt relief in the future.
Merkley said he applauds the action but views it as a “down payment” on the overall solution. He says he’ll pursue larger reforms, including affordable income-based repayment plans.
As enrollment has dropped at most of Oregon’s public higher education institutions during the pandemic, tuition has increased. The rising cost of higher education has made it even harder for students to graduate without substantial debt.
The Oregon Student Association, a nonprofit student advocacy group, said while Biden’s partial debt cancellation is a step toward addressing the “broken higher education system,” more needs to be done.
“Public higher education continues to be drastically underfunded, forcing students to shoulder the burden of high tuition,” OSA’s executive committee told OPB in a statement. “We urge President Biden to expand financial aid, fully fund higher education, and cancel all student debt.”
UO student body president Isakharov says she hopes Biden’s announcement will start a wider conversation about access and affordability for college.
“Forgiving loans is an amazing step, but I want to know what is next — both from the federal government, but also from the state of Oregon,” Isakharov said. “The systematic issues that force people to take out loans in the first place are continuing to raise tuition prices.”
Along with the partial, one-time loan cancellation, Biden announced a cap on monthly payments for undergraduate federal loans — lowering it from 10% to 5% of a borrower’s discretionary income.
He said the U.S. Department of Education is also proposing a rule to overhaul income-driven repayment plans in a multitude of ways. That includes forgiving loan balances after 10 years of payments instead of 20 years for borrowers with original loan balances of $12,000 or less.
Biden announced he will extend the student loan pause one last time. It had been previously extended to Aug. 30, but Biden said it will now last through the end of this year.