Biden Administration Gives ‘Fresh Start’ to Indebted Students

On August 16, 2022, the Biden administration passed the Fresh Start Initiative, restoring eligibility for federal student aid so students can complete their credential or degree without worrying about being plagued by student debt. Fresh Start extends the COVID-19 payment pause that obligates tax refunds and Social Security payments (including disability relief) to be released immediately, giving a full stop to default loan collections, protecting wages, and halting collection calls.

This relief comes as part of Biden’s larger student debt relief plan that will provide a fresh start for millions of ex-students, current students, and prospective students in the United States. Biden announced last week that the administration will forgive $10,000 for those who make less than $125,000 per year, and those who attended school on Pell Grants will receive up to $20,000.

During a time in which the cost of living is so high, the passing of this policy allows for lower-income families to catch up financially and continue moving forward. This plan is paired with the initiative to lift the freeze on student debt payments that initially began at the inception of the COVID-19 pandemic, projected to end in January 2023. Once this freeze is lifted, some of the 45 million American borrowers who cannot afford to pay back those outstanding loans will have a second chance alongside others who had to halt their academic career due to financial reasons.

In terms of interest, the $10,000 relief will take off costs from the initial total balance owed, whereas interest will remain stagnant within the required remaining payment.

MSNBC political analyst Elise Jordan is one among many critics against the bill, calling to question the validity of debt relief bill during a time in which the price of higher education is still rising at a consistent rate. Certain members of the GOP are questioning the timing of the relief bill, calling it a ploy to secure voters’ favor in the 2022 midterm elections over all else.

While the bill will provide some assistance, in comparison to the vast disparity in the affordability of education, critics say that the bill speaks more toward campaign motivations than an actual drive for change. In the coming months as the finances begin to make their way to their recipients and the midterm elections get closer, one of the most progressive policies under Biden administration will be put to the test.

Photo courtesy of Joe Biden on Facebook