What’s Up With Student Loan Forgiveness?

Reported By: Sierra Reisman

Photographed By: Allison Martinet

Nothing strikes quite as much fear in the heart of a college student as the words “student loan debt.” In the last few decades, the amount of debt required to receive an education has reached crisis levels, with the average student borrowing $32,637 to obtain a bachelor’s degree, and 54% of college graduates leaving school with debt. When Joe Biden became president, chief among his campaign promises was a plan for student loan forgiveness. As of October, the COVID-era pause on student loan repayment has ended, and there’s quite a bit of uncertainty about what borrowers can actually expect from the Biden administration. 

In June, the Supreme Court struck down the Biden Administration's loan forgiveness plan relying on the HEROES act, which would have canceled up to $20,000 in debt for borrowers who qualified. According to the Court, the provisions of the HEROES act are simply not broad enough to encapsulate the loan forgiveness plan, which ended Biden’s most significant loan forgiveness effort only three months before loan payments would become due.  

Fortunately, Biden announced a 12 month grace period, protecting borrowers from default and damage to their credit scores if they missed a payment. This, however, does not solve the overarching problem of student debt, and so what is the administration going to do now? 

To better understand what’s currently going on with this issue, I spoke to George Fox University’s (GFU) financial aid counselor, Brennan Rains. According to Rains, the Biden administration shifted to a new potential debt relief plan called “negotiated rulemaking” under the Higher Education Act. Rains explained that this program is going through completely different channels than the previous program, and it will have significantly narrower eligibility criteria. According to Rains, there is currently limited information available on the program, and should it be approved, it isn’t likely to go into effect until 2024 or 2025. 

Rains offered advice for current GFU students who have student loans. Because it's currently not clear what the future of debt forgiveness will look like, it’s essential that students are smart with their debt now. He described the current state of student loan repayment as “unprecedented” with the amount of people who are suddenly all needing to resume payments at once. 

Rains explained that with unsubsidized Stafford loans, students who are enrolled part time qualify for “[in-]school deferment” and are not required to make payments; however, these loans can still accumulate interest. Rains directed students to studentaid.gov as the best source of information where borrowers can access information about loan payments, payment schedules and identifying their lenders.  

The GFU Office of Financial Aid will continue to keep students informed as more information about loan forgiveness becomes available. In the meantime, Rains’s primary advice for students is simple: “avoid borrowing more than you need.” He shared that the best ways to avoid over borrowing are by communicating with a financial aid counselor and by being proactive in applying for scholarships. He expressed that the goal of the GFU financial aid department is “to help [students] borrow responsibly.”