With President Biden’s Student Loan Forgiveness Program officially starting up, how will this affect APU?
Last week, President Biden announced the launch of his new program on providing debt relief for those who have college loan debts. On the official website, a person’s income that falls under $125,000 or families who make less than $250,000 are eligible to apply.
Depending on those applying, Federal Pell Grant recipients can earn up to $20,000 while non-recipients can get up to $10,000 in debt forgiveness.
However, reactions to this program have been mixed. In a report by CBS58, some have expressed gratitude and joy over receiving relief over their student loan debts. Others shared a negative tone over their concern about paying higher taxes to pay for other people’s debts for them.
With people continuing to share mixed feelings, one topic that has not been discussed much is how this may affect universities including APU.
I was honored to interview Dr. Daniel Park, the chair of the APU School of Business finance, economics, and business analytics programs, to learn more about how this could affect the school.
When asked about his initial thoughts after hearing of the program, he shared that this program can be helpful for students who need financial aid due to student loan debt which has increased in the past few decades.
“The most recent data shows that the average student loan amount is over $37,000 per person among 43 million borrowers. That’s a huge amount!” he said.
Park added that around 15 out of 100 college students default on their debts. Some will deal with it for the rest of their lives, which is why this is good news for them. It provides some relief.
After being asked about his biggest concern about the program, he pointed out that preparation and funding are the main factors needed to be successful.
“Although it is good news, we need to think about how to prepare the financial resources for the program,” he said. He added that it will probably come out of taxpayer money.
The notion of increasing taxes to help pay off this program has been the source of concern for those who fear paying more considering the current economic inflation and talks of a looming recession approaching.
In fact, a motion by six states is currently halting the program from being activated according to Politico. Currently, the program is in limbo as the Eighth Circuit Court of Appeals looks over the appeal.
AP News reported that a big concern for many Americans is the federal student loans restarting up next year after it was paused due to the pandemic. As the story states, “Millions of Americans were expected to get their debt canceled entirely under Biden’s plan, but they now face uncertainty about whether they will need to start making payments in January.”
At the end of the interview, when asked about how the Student Loan Forgiveness Program could impact APU, Park said that “As a private school in which students’ tuition is the main portion of the school budget, at least it is good news since the program can save some students who considered transferring or dropping out due to financial difficulties. Of course, that does not resolve the current enrollment issues or rising education costs much.”
The impact for both APU and other universities appears to be minor. However, while this relief may be temporary, it still remains a good option for students to consider if they need it.