SOUTH BEND — Jamie Lynn Banhart laughed when she pointed out that both she and her youngest daughter are freshmen of the year.
The Elkhart native, mother of five, recently enrolled in the undergraduate nursing program at Indiana University South Bend after a long medical career as a phlebotomist and medical assistant. Her 16-year-old daughter started her ninth grade at Jimtown High School two weeks ago.
Banghart says children between the ages of 16 and 26 are proud that she is back in school and hopes that pursuing a college education will enable them to better support them. I said I want
am i eligible?What you need to know about Biden’s student loan plan
“Girls always want anything. I have teenagers,” Banghart said lightheartedly.
A new student loan forgiveness plan announced by President Joe Biden on Wednesday could further help Banhart provide for his children.
Banghart is one of approximately 43 million Americans eligible for relief under a plan to write off $10,000 of federal student loan debt for students with personal incomes of $125,000 or less. Borrowers who are recipients of a Pel Grant (a federal grant given to students of extreme financial need) can receive loan forgiveness of up to $20,000.
The White House estimates that about 20 million borrowers may cancel their remaining loan balances entirely.
“I think this plan will help me pay off my student loans in the long run,” Banhart said. “I can give my kids more[money]for sports, schooling, and the extra things they always want.”
In South Bend, the plan could bail out thousands of borrowers.
As a public university, IUSB has different tuition fees for in-state and out-of-state students. Resident tuition and fees are just over $7,800 this year, while non-resident costs are over $20,000. According to NCES data, between 2019 and 2020, about 43% of students had an average of $5,875 in federal loans.
Nearly 30% of Notre Dame students received an average of $5,600 in federal loans during the 2019-2020 academic year, according to the latest data obtained from the National Center for Education Statistics. According to Mickey Kidder, vice president for undergraduate admissions at Notre Dame Cathedral, the university welcomed the largest group of first-generation college students who are Pell-qualified this year, at about 20 percent of first-year students.
This year, Notre Dame tuition and fees are just over $60,000, excluding housing, transportation, and food, and depending on family income, the total financial aid package ranges from $37,000 to $66,000. increase. Kidder said 70% of his college students receive some form of financial support.
“Financial aid is a very unique situation for each student and family,” Kidder said. to fully meet the needs of
Biden’s plan for lasting impact on borrowers
The program comes at a time when Indiana’s college enrollment rate has plummeted to its lowest point in recent history, and Hoosier, who in 2020 chose to attend some form of college immediately after high school. Only 53% were students.
In addition to the one-time measure of canceling debt, the Biden administration’s plan will also create a lasting effect that is expected to bring relief to both current and future borrowers. Undergraduate loan repayments are limited to 10% to 5% of the borrower’s discretionary income. The White House estimates that the decision will reduce his average annual student loan payment by $1,000.
According to the U.S. Department of Education, the plan also shortens the period in which borrowers must pay off balances under $12,000 from 20 to 10 years.
Phil Schuman, executive director of Financial Wellness and Education within IU’s Money Smarts program, said this long-term change could help more college graduates consider public service-oriented jobs such as teaching and social work. Said I hope it helps. Large amounts of student loan debt have historically led some to seek alternative career paths.
Local Relief:Thousands of Hoosiers to cancel federal debt under Biden’s plan
Schumann said of the Biden administration’s plans, “I hope this sparks a debate. “It’s a band-aid. and we need to talk more about this.”
Now that the undergraduate debt has been paid off, the plan may also help some students who plan to continue their studies in more specialized training or graduate school.
Brandon Bentley, a third-year student at IUSB, said: “I have some student loans that are backed up, but coming from a low-income family, I couldn’t pay them all on time.”
He said the plan, especially the 5% income cap, would help him “not panic” when he’s trying to focus on graduate school in a few years.
“I had to pay $400 a month in loans, so I think this opened up new possibilities,” he said.
IUSB freshman and Pell Grant recipient Adam Bert said qualifying for the plan could significantly reduce his college tuition burden and enable him to pursue a PhD in English after graduation. He even says he has a sexuality.
“I call[the plan]a godsend, but God doesn’t like me that much.” My car broke down and I have to pay for my house.All the money I saved to go to college was used to fix and pay for my car.Medical bills.”
Inflation fears grow as loan repayments are postponed
Students like Bentley and Bert praise the plan for helping them plan family expenses and graduate school, but it’s not universally received well.
Conservatives, including Senator Todd Young of Indiana, have condemned the debt cancellation, saying, “I didn’t go to college, worked hard to pay off my loans, had a job as a student, or was a student.” “Americans who choose more affordable schools to minimize the burden will be disadvantaged.” debt. “
Others point to concerns that the plan could deepen the country’s record inflation, much like the Federal Reserve would raise interest rates to cool the economy.
The Responsible Federal Budget Committee said Biden’s plan “more than undoes deflationary pressure from the Inflation Reduction Act and will add an additional 0.15 percent inflation in the short term,” Bankrate analysts said. Sarah Foster told USA Today this week.
Republican Indiana Senator Mike Brown said in a statement on Wednesday, “This will exacerbate inflation, so we should focus on getting more value out of colleges rather than giving them another reason to raise prices. It is.”
Cooper Gean, a sophomore at IUSB, also said he wasn’t a fan of the plan. He believes that college diplomas will become less valuable as more people will have the ability to complete a college education.
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“And that money isn’t just forgotten. It’s just other people paying for it, not the students themselves,” Jean said. In many cases, more taxes will be imposed later, which discourages people from making more money.”
Still, higher education officials say many questions remain about how aid will be administered and who will be eligible. Many are directing students to the U.S. Department of Education for questions.
Federal student loan payments were suspended at the start of the coronavirus pandemic. announced that it is no longer needed. Also, those who have made payments during the pandemic may be eligible for reimbursement from Loan Services her provider.
More details on how to claim federal loan relief will be announced in the coming weeks. In the meantime, borrowers can sign up for notice at StudentAid.gov/debtrelief.
Email Carley Lanich, education reporter for the South Bend Tribune. Follow her on her Twitter. @carleylanich.
Email South Bend Tribune reporter Claire Reid at email@example.com. Follow her on her Twitter. @clairereidjed.