Savannah residents relieved, concerned after President Biden’s student loan relief announcement
SAVANNAH, Ga. (WTOC) - Some Savannah residents are feeling relieved and some concerned after President Joe Biden’s announcement for student loan debt relief.
The administration is canceling loans for two different groups of people.
How does the relief work?
People who got the Pell Grant can get up to $20,000 in loans canceled. People who make less than $125,000 can get up to $10,000 canceled.
That’s just for federal loans held by the U.S. Department of Education.
The DOE is working on an application process for the relief.
The White House says that should be available by the time payments resume on federal student loans. Remember, the pause on that will expire at the end of this year.
The administration says it’s more than a campaign promise with the average cost of a 4-year degree nearly tripling since 1980.
How do residents feel?
We’re hearing from those trying to balance the cost of education with an uncertain two years brought on by the pandemic and current economic concerns.
Receiving the Pell Grant, Frances Gillison finished her college career in 2014.
“Relief I mean, who wouldn’t want it you know,” Gillison said.
While grateful for some kind of relief, she’s struggled paying back her student loans and they’ve more than doubled.
She feels the rising costs of groceries and child care coupled with people’s income should be a factor instead of just giving a fixed number for relief of 10 or 20 thousand.
“I think they haven’t considered all factors when they put out those numbers so it’s definitely time to go back to the table, the drawing board and figure out something that’s manageable for working class,” Gillison said.
Local bankruptcy specializing attorney Jeremiah Gastin helps people with student loan debt often and says President Biden’s efforts will help people in lower and middle income brackets.
“This will really help individuals get into the housing market, help buy cars,” Gastin said.
Gastin adds that if you pay your minimum requirement on time every month, your loans will no longer gain interest, he says helping many.
“The amount of their monthly payment has not been significant to cover the interest that’s accruing, their student loan balances have been growing over all these years,” Gastin said. “That will no longer be the case under the new plan.”
Julia Campbell is concerned that tax payers will have to foot the bill for the debt being forgiven.
“The working class folks who chose not to take out loans and whether chose not to college or to do more affordable community colleges while they work, I don’t know if that’s their burden to bare,” Campbell.
Gastin says taxes will most likely not go up as a result of these student loan forgiveness efforts.
His number one tip is to contact your servicer with any questions
“In many instances, this forgiveness will be automatic but don’t leave that to chance. Contact somebody, contact your servicer,” Gastin said.
Gastin says people who are eligible for this program will receive letters in the mail sometime in December before the pause ends.
The Biden Administration says the Department of Education is working on a couple of proposals for managing future loans.
That includes shifting to an income-driven repayment plan.
The proposal includes cutting required payments from 10 percent to 5 percent of your income after you pay your bills each month.
It would also forgive balances after 10 years of payment instead of 20 for people with $12,000 or less in loans.
The Department is also proposing student loan forgiveness credits for new groups.
The credits include people who work for non-profits, in the military or work in a federal, state or local government.
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