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.
I think there is an obscured part of the student loan debate were federal loans were never really quite enough to fund college alone. Rising tuitions have meant a private loan becomes a basic necessity for covering the costs unless you have something like generational wealth, or specific subsidy like a scholarship.
It’s created a feedback loop where students are funneled increasingly towards taking on private loans to complete their degree, or have to drop out and have all the debt for nothing. To the point one could argue people aren’t benefitting from the loans to begin with.
Subsidizing without regulation just raises costs.