Vacations were a rarity when it came to the childhood of Nicole Platt and her brothers.
Their family chose to invest their money in something they saw as more pressing, although they did go to Disneyland one year.
The Platts didn’t struggle all that much to meet their needs while the kids were growing up, Nicole said, but they did scrimp and save where possible so that their kids could go to college and not have to take costly student loans toward that end.
This approach panned out well.
Nicole, 24, is doing her master’s in couples and family therapy, and even in grad school, it looks like she won’t have to take out a student loan to finish her degree. Nicole’s brothers too have joined college.
“I’m very fortunate because my family purposely saved money for me not to take out loans,” Platt said. “We didn’t take vacations at all growing up, and it was purposely for us to have enough money to go to college and not having to get loans and be in debt.”
So when it was announced last week that President Biden’s administration will eliminate $20,000 in student debt, she shrugged it off, because she had already paid for schooling at UNLV, and many of her friends could use the new state of affairs to have their loan debts wiped.
It was Platt’s parents that took the news as more of a slap to the face, she said.
“They were the ones for decades who put money aside for us,” Platt said. “Maybe we could have taken out some loans and then had a few nice vacations.”
The White House’s announcement last week elicited praise and criticism from all sides, where many Democrats claimed the move fell short, and Republicans slammed it as a bail-out.
Maryam Raja, who presides over the South Asian Student Association at UNLV, said many would criticize the program, and that many borrowers still wouldn’t let off the hook completely. Overall, however, the plan would help a lot of people.
“I think there will be a lot of students who will see a positive difference in their education and in their financial needs to pursue higher education,” Raja said. “I think it’s really important that we don’t necessarily say this program sucks, or whatever, because at the end of the day there will still be a lot of students that will be helped, especially if they are aspiring for goals like going to graduate school.”
The final framework for the Biden administration’s new plan isn’t complete yet, but borrowers can get $10,000 in debt relief provided they earn under $125,000 a year, or live in a household making under $250.000. Receivers of Pell Grants—which go to low-income and minority students—would be forgiven $20,000 from their debt.
This is on top of reforms to the Department of Education’s repayment program driven by income, and also changes to be made to interest rates where it concerns borrowers that make on-time payments.
According to the Department of Education, 6 out of 10 borrowers have gotten Pell Grants, around 27 million borrowers will qualify for a relief of $20,000, and over 43 million will qualify for $10,000 in relief. Close to 20 million stand to see their loans fully canceled, the White House says.
In the state of Nevada alone, thousands will qualify for at least partial loan forgiveness, per the figures provided by the System of Higher Education in the state. Starting academic year 2018-19 and ending academic year 2020-21, the NHSE has given out 75,543 loans in all, which amount to over $812 million.
Even so, many borrowers make up a part of the population that moved to Nevada after completing college. There are also those who have loans dating back past 2018, according to NSHE interim vice chancellor Renee Davis. Despite the massive impact that canceling around $300 billion will have, Davis says the core issue is decades of tuition increases, which have made it a struggle to attain secondary education.
“By and large, this is a policy that is going to impact individuals who are no longer students,” Davis said. “My first reaction is that this isn’t really doing anything to help current students, and it’s not addressing the root issues at all.”
Abigail Enright sees the decision from the White House as a lifeline for students choosing to get a degree by first going to community college. She directs the financial aid department at CSN, and says the move will aid students to prolong their education or even come back afterwards to finish a degree.
CSN has 14,777 students who got financial aid in some form for the academic year of 2020-’21, according the Enright. Close to 3,615 students had at least one loan, with the amounts averaging at $3,440.
“As a practitioner in financial aid and seeing the amount of loans students take out nowadays, I think it’s going to offer some relief for a lot of our students and graduates — relief that I guess never really has been there before,” Enright said. “Even though a lot of our student population is not taking out loans, it’s great for the ones who do.”
Even so, Enright wants something to be done about the overall school cost, which covers books, tuition, as well as room-and-board for some. She said the solution lies partially in expanding eligibility for Pell Grants.
Lourdes Gonzalez, who directs the department of scholarships and financial aid at UNR, said about half of students graduating from the place will take a loan sometime, and the amounts average at $23,000. Out of this, around 95% will stand eligible for debt forgiveness of up to $10,000, while somewhere between 40 and 50 percent will see their debts canceled outright, Gonzalez said.
“We are certainly celebrating the news because it will provide relief to thousands of our low- and middle-income students and alumni, ” Gonzalez said. “And this is great because it’s a step toward getting back to college affordability, but we know more needs to be done.”