UCLA graduate Ethan Carroll is changing careers with the help of classes at Cuesta College.
“Right now, I’m doing some classes, so I can apply for graduate schools like PA programs,” said Carroll.
Community college is offering Carroll some economic relief.
“I think something that holds a lot of people back is the fear of that eventual debt you’ll have to pay off,” said Carroll.
For freshman Katie Wiest, it is not only the pressure of getting good grades.
“I’m hoping to get a doctorate degree, so that’s a ton of school and a ton of money, so I have been worried about how to pay for college,” said Wiest. “I’ve been trying to budget and get financial aid where I can.”
Now, the Biden Administration is bringing back a campaign promise of student loan relief.
"No one with an undergraduate loan today, or in the future, whether for a community college or a four-year college, will have to pay more than 5 percent of their discretionary income to repay their loan,” announced President Joe Biden. “That's income after you pay the necessities like housing, food and the like. You currently pay 10 percent.”
Plus, a $10,000 loan forgiveness for those earning less than $125,000 per year or families making less than $250,000 per year.
If you were a Pell Grant recipient, the loan forgiveness bumps up to $20,000.
“The majority of our students come in and they declare that transfer is their intended goal, so even though few students actually engage in the student loan process while they are at Cuesta College, as they go on to complete their bachelor’s degree, absolutely, they are taking on that student debt,” explained Cuesta College Superintendent President Jill Stearns.
“Many, many of our alum are going to benefit from this,” said Stearns.
The student loan forgiveness would also apply to current students whose loans originated before July 1, 2022.
According to the Education Data Initiative, 43 million people have federal student loan debt which adds up to a balance of $1.620 trillion.
“Cost is fundamental in decision-making for everyone as they are deciding where they want to go to college,” said Stearns.
What can borrowers do now?
“Know what your interest rates are, know what kind of loans they are — if they are private, public, federal, subsidized or unsubsidized,” explained Eric Maldonado, Aquila Wealth Advisors’ Owner.
Set a financial game plan.
“If you have other debt, that’s a great place to put that money. Pay that other debt whether it’s credit card debt or car debt,” recommended Maldonado.
In the meantime, students remain hopeful.
“People that are older and even people that are younger will be more excited about college in general if they know that it is not going to be a huge burden for them and their families,” said Carroll.
Among other goals, the Biden Administration wants to make community college free and to double the maximum amount of Pell Grants.
“Cuesta offers the Cuesta Promise for our local high school graduates that covers the cost of registration fees, but having free community college would really be a game changer because we understand the cost of textbooks is a challenge, transportation is a challenge, childcare can be a challenge, so this will provide opportunities for those Cuesta Promise resources to go to those other needs,” added Stearns.
Another important detail in this program is the extension of student loan repayment plans to December 2022, which means that federal student loan payments will resume in January 2023.
To learn more about the plan, click here.