Biden's loan forgiveness plan will help ease financial burden of Austin college students
Youth advocates and college administrators in Austin are praising President Biden’s decision to forgive student loan debt for individuals who make less than $125,000.
Up to $20,000 of federal student loan debt will be canceled for Pell Grant recipients. Other qualifying borrowers will have as much as $10,000 in debt forgiven. The Biden administration also extended the pause on federal loan payments through the end of 2022.
Aurora Harris said the move will bring relief to millions of people who have struggled to make payments.
“We know that this is especially true for Black and Brown borrowers who often have to borrow more to attend college because they don’t come from families of wealth,” she said.
Harris, who is based in Austin, is the Southern regional director for Young Invincibles — a group that advocates for the economic security of young adults. According to Harris, the average Texas borrower has $32,000 in student loan debt.
"Many of our graduates — they are going to qualify for this and they aren’t going to have any student loan debt. And so this is just absolutely amazing.”Karen Serna, director of ACC's Student Money Management Office
“It really shows that the Biden administration is committed to fixing this broken system, and we’re really excited about that,” she said.
Karen Serna also celebrated the Biden administration’s announcement as a big step toward addressing the student loan debt crisis. The director of the Student Money Management Office at Austin Community College said 35% of ACC students use federal loans. She said the Biden administration’s plan will be especially impactful for the school's graduates because their median student loan debt is $10,000.
“That means many of our graduates — they are going to qualify for this and they aren’t going to have any student loan debt,” she said. “And so this is just absolutely amazing.”
Another 10,000 or so ACC students were Pell Grant recipients during the last academic year.
Serna said this relief will help current students move forward with their lives and education in the Austin area. Often, she said, ACC students aren't taking out loans to cover the cost of tuition, but rather to cover the cost of living.
“ACC tuition has not increased in nine years but the cost of living in Central Texas most definitely has,” she said. “So our students will have more resources to continue living in Central Texas.”
Still there is more work to do, Harris said. She, herself, has $81,000 in student loan debt for a four-year degree. As a Pell Grant recipient, she stands to have $20,000 in debt forgiven.
“It makes a dent, but we definitely were hoping for more [relief] and will continue to push the Biden administration for more,” she said.
Harris also has concerns about the $125,000 salary cap for individuals. (It’s $250,000 for couples.) She said while it appears this helps people who need it most, it could create another hurdle for borrowers.
“The folks who really need this relief the most, like those low-income folks, the folks who are not up to date with their servicer, are going to have a burden on them now to complete some type of an application,” she said.
Harris does not want to understate what the Biden administration is doing to lower student loan debt, but she said, ultimately, it does not address the systemic issue of the cost of higher education in Texas and the U.S.
“Until that’s done we’re going to continue to be in a cycle of students — particularly students of color [and] low-income students — having to borrow more than their wealthier counterparts,” she said. “And we’re going to continue to have a debt-for-diploma finance system.”