HARTFORD, Conn. — As students moved into their Quinnipiac University dormitories on Wednesday, most approved of President Joe Biden's plan to eliminate up to $20,000 in federal student loan debt for college students. But, a professor from another university does not like this policy.
Biden announced Wednesday that people making under $125,000 a year and have debt from borrowing money for higher education could get $10,000 in loan relief. Pell Grant recipients can get $20,000 in loan forgiveness.
The federal freeze on student loan payments will also be extended again until January 2023.
"I think it's a great plan," QU student Jack Quinn stated. "You see so many large corporations are bailed out all the time. I don't see why we can't help out students, the next generation."
Individual borrowers earning up to $125,000 annually and families whose earnings don't exceed $250,000 a year are eligible for the $10K loan break.
But, a University of New Haven professor cautions against comparing this forgiveness to corporate bailouts.
"The big difference is those went through Congress where this was just kind of a unilateral action saying that we're going to transfer money from one group of Americans to a different group," said Patrick Gourley, an economics professor at the University of New Haven.
"On the one hand, I don't mind forgiveness however there is sort of an inherent contract when you take on student debt that you would be paying that student at off," said Peter Nora, a QU parent.
One QU student, who says her mom is the one on the hook for her college costs, is appreciative of the break her mom will receive.
"I know Quinnipiac is a really expensive school to go to and even with a scholarship it's a lot of money," said QU student Olivia Campbell. "So, like, helping us out with 10 grand you know forgiving 10 grand in debt could just really help out."
Some estimates place the price tag for the student loan forgiveness program: in the neighborhood of $300 billion.
"And if universities think that they can that loans will get forgiven you will see, could see very large increases in the price of higher ed going forward," said Gourley, who doesn't like the Biden plan because it rewards borrowers who make too much money, in his opinion.
According to federal statistics, more than 43 million people have federal student loan debt that average is just under $38,000.
The White House estimates Biden's plan would erase the federal student debt of about 20 million people.
Connecticut's leaders and candidates running for office this election cycle are voicing their thoughts on the Biden administration's plan to cancel student debt.
Congressman John Larson (CT-01) called this move a "vital first step for Americans" and hopes student loan forgiveness and lowering college costs continue.
“Today, millions will breathe easier because President Biden has used his executive power to offer working-class Americans much-needed relief,” Larson said in a statement.
Democratic U.S. Representative Rosa DeLauro (CT-03) said in a statement:
“Americans are living paycheck to paycheck. The biggest corporations are using their money to rig the game, and costs are on the rise.
“I applaud President Biden for taking a necessary step today to level the playing field for working Americans by cancelling $10,000 in student debt for borrowers who earn under $125,000 a year and up to $20,000 for Pell Grant recipients. This will completely wipe out debt for millions of borrowers and give many the economic security they need to invest in a small business, buy a home, or simply just take care of their families.
Republican candidate for U.S. Senate Leora Levy denounced the decision, saying it's "another government hand-out."
"Not only will this encourage others to take loans that they cannot afford to repay, it will also further drive skyrocketing inflation," Levy said. She added, "It is not the taxpayers’ job to repay personal debts."
U.S. Senator Richard Blumenthal countered with a statement of his own.
"President Biden’s student loan initiative brings real relief to millions of hard-working Americans. I have listened to Connecticut residents who are struggling to make ends meet under the mountain of ever-growing student loan debt. By canceling significant amounts of student debt and extending the pause on federal student loan repayments, President Biden has taken significant steps forward in addressing the immense student debt crisis. These actions will help many middle class and low-income families, especially in minority communities—and bolster the economy. I have long pushed for this relief—and more—to help struggling borrowers, and will continue fighting for even more actions to comprehensively address the student debt crisis.”
Connecticut Gov. Ned Lamont also weighed in, tweeting,
"This action is historic and is good news for thousands of middle-class workers in Connecticut. It builds on our efforts here to increase access to higher education, including through PACT, Connecticut's debt-free community college program."
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