After President Joe Biden announced at a press conference on Aug. 24 that his administration would be forgiving federal student loans disbursed before June 30, Temple University, professors and students discuss shared how Biden’s plan will impact Temple’s student body.
Biden’s proposal will forgive $10,000 of loan debt for individuals making $125,000 or less and households making $250,000 or less and an additional $10,000 for students who qualify for the Pell Grant.
“With more than 30% of Temple’s Class of 2026 receiving a Pell Grant, that mission continues to ring true today, and President Biden’s announcement of a student loan debt relief plan will play an important role for eligible students and alumni in higher education affordability,” wrote Stephen Orbanek, a university spokesperson, in an email to The Temple News.
Temple currently has 7,600 students, during the 2021-22 year, who have received the Pell Grant as a part of their financial aid, WHYY reported.
“Removing $10,000 of debt from those borrowers is going to drop their monthly payment by over $100 over the next ten years,” said Wayne Williams, an accounting professor. “It will also improve their debt-to-income ratio.”
Angelina Makhoul supports Biden’s proposal, which aims to help up to 43 million borrowers.
“It’s an awesome plan because college is a lot of money and I feel like they prey on the students in any way that they can,” said Makhoul, a senior neuroscience major.
The Board of Trustees increased tuition by 3.9 percent for the 2022-23 academic year after increasing it by 2.5 percent in the 2021-22 academic year. The two years prior to that Temple froze tuition during the height of the COVID-19 pandemic.
This year, Temple invested more than $110 million in financial aid for students. The Fly-in-Four program, which incentivizes students to graduate on time, reduced Temple student debt’s by $2.4 million between 2013 and 2016. Additionally, Temple offers webinars on student financial aid.
Temple students graduate with a median federal loan of $24,437. Nationally, student loan borrowers owe an average of $36,510 to the federal government, according to the Education Data Initiative, a group that collects data on the United States education system
“$10,000 is a lot of money, but most people have loans that are much larger than that and I don’t think that necessarily covers an enough amount,” said Reeya Shah, a sophomore undeclared major.
Biden also extended the federal moratorium on student loan repayments until January 2023, marking the fourth time he extended the pause.
“This will be the seventh time, since the Trump Administration started it in 2020, that student borrowers will not have to pay back their student loans as a result of the pandemic,” Williams added.
However, Williams wants students to remember that interest rates on their loans will resume after the moratorium has ended and that forgiven loans may have an impact on their taxes.
Currently the interest rates for undergraduate students are 4.99 percent and can increase to 7.54 percent for graduate students, Williams said.
The rates for undergraduate and graduate students are on a fixed interest rate of 4.99 percent and 7.54 percent, according to Federal Student Aid.
Additionally, canceled loans will not count as taxable income for federal taxes. In Pennsylvania, student loan forgiveness may become taxable.
“Reliving that debt is significant in terms of increasing the barrier to financial health of the borrowers,” Williams said.
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