President Joe Biden on Tuesday launched a promotional blitz for his new program that helps student loan borrowers repay their debt, just weeks before millions of Americans are set to receive a loan bill for the first time since the beginning of the pandemic.
The Biden administration is mobilizing to convince borrowers across the country to sign up for the new income-driven repayment program — dubbed the “SAVE plan” — which caps interest accrual and lowers the monthly payment amount for many borrowers.
“It’s the most affordable student loan plan ever,” Biden said in a video released by the White House on Tuesday, describing the program as a major reform to a student loan system “that hurt borrowers for much too long.”
“If you’re eligible for the SAVE Plan, sign up now so you can lower your monthly payments in advance of payments resuming this fall,” Biden said.
This is a multi layered problem without an easy solution. At face value, there really isn’t anything wrong with your statement, but once you dive into student loans/college education/how public education made everyone believe the only path forward was college - maybe, just maybe something needs to be done.
Capping interest rates so that people can actually pay their debt down is not a bad thing. The root of the problem still needs to be tackled - college is too expensive and administration departments are too bloated - but when the government guarantees the loans, colleges just raise rates because they know students can get them. Schools are not teaching enough financial literacy to make sure kids understand the opportunity cost of what they are signing up for.
Saying this as a person lived at home and commuted to undergrad and for my master’s degree and paid my loan back.
i dont have any issue with loan rates being capped, but I wholehearted believe that anyone who takes out a loan should be required to pay it back. it’s true that higher education has a lot of bloat, but it’s the nature of the beast for organizations to grow over time. I personally dont believe that the federal government has any right to tell a business how it can run itself - because that’s what colleges/universities are - they’re for-profit businesses. the correct play here would be to choose a college/university that has low bloat - but that would of course require quite a bit of research.
part of the issue, as I see it, with the “schools dont teach financial literacy” is that funding for public school is, at a certain level, dependent on how well the students perform at absorbing the material and then regurgitating it in structured tests. what happens when financial/maths learning is introduced and then a large percentage of the student body fails to learn it? the end result is that school district cant afford new teachers so certain programs are dropped, or teachers are fired. is financial literacy so important that you’d prefer it at the expense of arts programs or sports programs? reading/writing/arithmetic and literally nothing else only really works when you’re in the late 1800s and farming is what you’re graduating into.