During the recent State of the Union address, President Biden highlighted his administration's focus on higher education initiatives. In an election year, this speech served as an opportunity for the President to reiterate his accomplishments and emphasize key areas for national attention, on which he plans to focus if re-elected.
For a president seeking re-election, the State of the Union is a platform to communicate his administration's positions. Regardless of your political stance, it is crucial to comprehend the perspectives of each candidate. In the realm of politics, speeches during election periods are more than just words; they signify policy priorities that could result in meaningful changes for Americans.
Biden’s “Fix” of Student Loan Programs
There were only brief mentions of Biden’s higher education actions taken during his administration. While only a brief mention, there are some very real actions that the American public has felt.
He acknowledged his inability to “universally change the way in which we dealt with student loans,” which speaks to the overturning of his mass student loan forgiveness program in the Supreme Court. However, the Biden administration has taken some significant actions towards student loan forgiveness, for current and future student loan borrowers.
Biden Student Loan Forgiveness Initiatives and Fixes
The Biden administration has focused plenty of efforts on student loan forgiveness. The administration has cancelled debt for almost four million Americans, to the tune of $138 billion in student loan forgiveness and discharge.
Among the key measures taken are the temporary waivers of specific requirements within the Public Service Loan Forgiveness Program (PSLF), enhancements to the Total and Permanent Disability Discharge process, reviewing of income-driven repayment (IDR) plan forgiveness through a one-time recount and qualifying payments requirement, and streamlining Borrower Defense claims for borrowers who were misled by their colleges.
The two fixes he claims are rooted in the creation of the SAVE Plan and updates to PSLF. The SAVE Plan, the latest income-driven repayment plan, is being released in three (originally two) phases. The plan is extremely generous and is often the most affordable option for student loan borrowers. Upon receiving the fast-tracked forgiveness option through the plan (which was expected to be released in July 2024), borrowers immediately began receiving student loan forgiveness. It is estimated that the fast-tracked forgiveness opportunity will result in forgiveness for over 150,000 student loan borrowers. Legal challenges are expected for this plan.
The second initiative he referenced is the updates he made to the PSLF program to make it easier for borrowers to qualify and encourage those denied in the past to reapply. Until he issued temporary waivers, only 2% of applications had been approved. Through mid-January 2024, PSLF forgiveness reached over 790,000 borrowers and resulted in over $57 billion in forgiveness.
The Biden administration continues its efforts in the realm of student loan forgiveness, striving to realize the full potential of the SAVE Plan and finalize regulations for this alternative solution, “Plan B” in student loan forgiveness.
Biden’s Stance: The Federal Pell Grant Program
Critics of President Biden's student loan forgiveness initiative argue it places an unfair burden on taxpayers, especially those who did not attend college or have already paid off their loans. They worry about the precedent it sets for personal responsibility and financial planning. Still, there is concern that forgiveness might not address the root problem of college affordability, potentially leading to higher tuition rates as colleges assume future debts may be forgiven. This perspective emphasizes the need for a holistic approach to higher education funding that ensures accessibility while also maintaining fiscal responsibility and fairness across different demographics.
Recently, Congress passed a Continuing Resolution bill to fund the government until March 22, 2024. However, this bill left federal Pell Grant funding in flux. The FAFSA Simplification Act revised the calculation of the information provided in the FAFSA. The expected family contribution was replaced with the student aid index (SAI). One of the key changes in the SAI is thatthe calculated number could be as low as -1500. The Continuing Resolution bill said that the SAI floor could be -1500 for the 2024-2025 academic year, but the floor will be reset to zero for the 2025-2026 academic year. This could result in some students losing federal Pell Grant funds in the future.
President Biden expressed his intention to expand the Pell Grant program by expanding the Pell Grant program by “increasing the Pell Grants to working- and middle-class families and increase record investments in HBCUs and minority-serving institutions, including Hispanic institutions.”
In addition to the Pell Grant for those who attend college, Biden addressed those who may opt to work instead of college by saying, “I’m also connecting local businesses and high schools, so students get hands-on experience and a path to a good-paying job whether or not they go to college.” Addressing those who envision a career without a college degree but aspire to secure a livable wage in the country.
What to Takeaway
In essence, these brief but substantial mentions during Biden's speech underscore the intricate connection between political policies and tangible impacts on individuals' lives. With significant policy shifts on the horizon if the Biden administration were to be re-elected, staying informed and understanding the political landscape becomes crucial.