By: Leighanne Jordan
According to the Bellarmine financial aid office, 20% of Bellarmine students use loans to help pay for their education.
On Aug. 24, a day before the start of the 2022 fall semester for Bellarmine students, President Joe Biden and Vice President Kamala Harris announced plans to forgive student loan debt for millions of Americans.
“I’m excited about it because it’s a great opportunity for students to take,” Sydney Schott, a junior from Gaylord, Minnesota, said. Schott said that she was not entirely sure what the new proposal entailed but knew that she has around $18,000 in student loan debt.
“That’s a big weight off of people’s shoulders,” Schott said. “And it allows more people to go to school if they would like to.”
April Tretter, the director of financial aid at Bellarmine, said the average graduate leaves with nearly $25,000 in student loan debt.
Breanna McWhorter is a virtual MBA first-year student at Bellarmine. McWhorter graduated from Bellarmine in May with a communication and marketing degree. She said she graduated with debt even though she had athletic and academic scholarships and lived at home for all four years of her undergraduate career.
“Student loan forgiveness would help forgive payments I won’t be able to make,” McWhorter said, “and I think that with the rising costs of college tuition, this will become more common.”
Although many students have heard about the president’s plan, some say they don’t really understand it.
Alexis Hargrove is a senior nursing student from Fountain Inn, South Carolina. She said she has heard about the plan but wants to know more about it.
Brandon Barrera, a senior soccer player from Lagrange, Kentucky, said he “does not understand how money would dissipate.” Barrera said he is trying to wrap his head about how it student debt relief plan works.
The news sounds beneficial to students, however, what does the student debt relief plan exactly mean? Tretter said that Bellarmine’s financial aid officers know as much about the plan as the students. Any further information, she said, would be found on studentaid.gov.com.
The Biden-Harris Administration’s Student Debt Relief Plan has three parts:
· Part 1 - final extensions of the student loan repayment are paused to ensure a smooth transition to repayment and prevent unnecessary defaults.
· Part 2 – provides targeted debt relief to low- and middle-income families. The U.S. Department of Education will provide up to $20,000 in debt cancellations to Pell Grant recipients and up to $10,000 in debt cancellation to non-Pell Grant recipients. However, borrowers are eligible for this relief only if their individual income is less than $125,000 or $250,000 for a household.
· Part 3 - requires borrows to pay no more than 5% of their discretionary income monthly on undergraduate loans and raises the amount of income to protect from repayments. This part also forgives loan balances after 10 years of payments.
Kentucky officials have said the state will not tax this benefit. However, other states will. According TaxFoundation.org. Mississippi, Minnesota, Wisconsin, Arkansas and North Carolina will tax forgiven student loan debt with state income taxes.
If students believe they qualify for student loan forgiveness they may contact their loan servicer to begin the application process. For more information, students may visit studentaid.gov.com.
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