Ally Reith, a sixth-year learning science doctoral student, currently owes $23,159.86 in student loans. But recently announced student loan relief will soon reduce that number by $20,000.
“This particular program is going to change my life,” said Reith, a former Daily editorial contributor.
Reith is among about 95% of student borrowers who are eligible for loan forgiveness under the student debt relief plan, the Congressional Budget Office estimated in June. The plan is designed to relieve up to $20,000 in student loans for individuals earning $125,000 or less, or couples earning $250,000 or less. Federal Pell Grant recipients, like Reith, will be eligible for $20,000 in assistance.
Although she will receive loan relief, Reif said her debt was smaller than that of other graduate students in the North West. She supports the cancellation of all student debt.
“I don’t think this move on behalf of Biden and (Vice President Kamala) Harris the administration is enough to atone for how broken the system is and how much student loan debt has turned into this absolutely hellish bureaucratic monster,” Reith said.
Imeña Valdes, a third-year plant biology and conservation student, said the $20,000 she will receive from her student loan forgiveness won’t even cover a quarter of her total debt. She said she wanted the government to consider relieving a higher amount of debt.
Valdes said her loans are difficult to repay because her department provides little financial support, unlike some other NU graduate programs.
Some economists, including former university president Morton Schapiro, argued that student loan relief should not apply to graduate students, as they are statistically more likely to have higher incomes after graduation. Reith and Valdes are both at odds.
“There’s very little support for people who just want to get a master’s degree, and I don’t think we’ll necessarily always end up in a higher tax bracket, because many entry-level jobs with base salaries require a master’s degree now,” Valdes said.
However, Kellogg Professor Nicola Bianchi said he believed the student loan forgiveness scheme was not intended for students at elite private institutions.
For-profit schools — often with lower graduation rates — have contributed far more to the student loan crisis than schools like NU, he said.
“I think the real reason this reform was needed was to fix a problem in other parts of the higher education system,” Bianchi said.
Bianchi said the rebate plan could benefit low-income students by making student loan repayments more manageable. Although the plan protects borrowers and taxpayers, he said it’s still unclear how the policy will affect the overall price of a college degree.
Since elite institutions like NU provide significant financial aid, fewer students may be in dire need of student loan forgiveness, Bianchi added. According to the Office of Undergraduate Admissions, 61% of NU students receive financial aid, and the University will allocate $272 million in financial aid to undergraduate students in the 2022-23 academic year. .
However, some undergraduate students receiving financial aid can still take out loans to cover uncovered costs, Bianchi said.
Weinberg’s second student, Elle Jung, is one such student. As an applicant for QuestBridge, a nationwide program linking low-income youth with major universities, Jung did not correspond with NU but was accepted during the Early Decision admissions cycle. Although she received financial aid from the University, she said she also had to borrow from NU.
Jung said she and her mother plan to work to pay off the loans. However, due to the cancellation of the student loan, she said she was less worried about repayment.
“I wasn’t even supposed to get this (loan cancellation),” Jung said. “I had to pay for all that. So anything that can help, I’m grateful.
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— Biden proposes student loan reform but stops short of full cancellation
— From Loan Cancellation to Pell Grant Expansion: The Democratic Candidates’ Ideas for Higher Education
— The no-loan policy will be fully implemented in 2019-20, but students still grapple with financial aid options