Leahy, Sanders welcome Biden’s student loan debt forgiveness announcement
Vermont Business Magazine Sen. Patrick Leahy (D-Vermont) and Sen. Bernie Sanders (I-Vermont) posted the following comments on President Biden’s Wednesday announcement on canceling student debt:
Leahy: “I commend the president for coming up with a way to help people in debt. Back home in Vermont, UVM, for example, has recognized these challenges and has refrained from raising tuition fees for the past four years, while our state colleges strive to provide a affordable access to higher education for Vermont students. The cost of higher education has become unsustainable for most Americans. Many find themselves saddled with high amounts of student loan debt. Too often I hear of Vermonters who have taken out a second mortgage on their home or are working a second or third job to pay off their student loans. I know that many have worked for years – even decades – only to make a dent in the principal amount owed due to high interest rates. It is heartbreaking to hear the stories of those who have put off major life decisions, like having a child, because of student debt. It is a pervasive and unacceptable experience that Americans face in this country.
According to the White House, their three-step plan to reduce Americans’ student debt is as follows:
- Provide targeted debt relief to address financial damage from the pandemic, in line with the President’s campaign pledge. The Department of Education will provide up to $20,000 in debt forgiveness to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt forgiveness to non-Pell Grant recipients . Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of income – will benefit from this action. To ensure a smooth transition to reimbursement and avoid unnecessary defaults, the pause on federal student loan repayments will be extended one last time until December 31, 2022. Borrowers should expect to resume payment in January 2023.
- Make the student loan system more manageable for current and future borrowers by:
a:) Cut monthly payments for undergraduate loans in half. The Department of Education is proposing a new income-based repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of the borrower’s discretionary income, that’s half the rate borrowers currently have to pay under most existing plans. This means that the average annual student loan payment will be reduced by more than $1,000 for current and future borrowers.
b:) Fix the broken Public Service Loan Forgiveness Program (PSLF) by proposing a rule that borrowers who have worked in a non-profit organization, military, or federal, state, tribal or local, receive appropriate credit for loan forgiveness. These improvements will build on temporary changes the Department of Education has already made to the PSLF, under which more than 175,000 public servants have already had more than $10 billion in loan forgiveness approved.
3. Protect future students and taxpayers by lowering the cost of college education and holding schools accountable when they raise prices. The president defended the largest increase in Pell grants in more than a decade and one of the largest one-time inflows to colleges and universities. To further reduce the cost of a college education, the president will continue to fight to double the maximum Pell grant and make community colleges free. Meanwhile, colleges have an obligation to keep prices reasonable and ensure borrowers get value for their investments, not debts they can’t afford. This administration has already taken key steps to strengthen accountability, including in areas where the previous administration weakened the rules. The Department of Education announces new efforts to ensure student borrowers get value for their tuition.
Leahy: “As a strong supporter of the Civil Service Loan Forgiveness Program, I am pleased to learn that the administration has revamped the PSLF program, which has already identified more than 100,000 eligible borrowers at $6.4 billion dollars of loan relief. Additionally, the DOE is providing $7.8 billion in assistance to more than 400,000 borrowers with permanent disabilities and approving $2 billion in borrower defense requests to approximately 107,000 borrowers. These changes also include approving $1.26 billion in exits from closed schools for students at several now-defunct colleges and universities. Like many, many Vermonters, I am encouraged by these changes and believe that we must take action to help reduce student debt in this country, and in a meaningful way.
Senator Bernie Sanders (I-Vermont) said in a statement, “The President’s decision today to reduce the outrageous level of student debt in our country is an important step forward in providing real financial aid to a class medium in difficulty. Today’s announcement to reduce student debt by up to $10,000 for working-class Americans and up to $20,000 for Pell Grant recipients will eliminate student debt by some $20 million. Americans and will reduce the debt by some 43 million. The result of this decision is that millions of Americans will now be in a better position to start families or buy the homes and cars they long need. This is a big deal.
“But we need to do more. In an age of massive income and wealth inequality, education, from kindergarten through college, must be a basic right for all, not a privilege reserved for the wealthy few. If the United States is to compete in the global economy, we need the best-educated workforce in the world, which means making public colleges and universities free, as many other major countries are doing now. – and that includes trade schools and minorities. establishments too. In the year 2022, in the richest country in the world, anyone in America who wants to get a higher education should be able to get that education debt-free.
(WEDNESDAY, August 24, 2022) — Senator Patrick Leahy