RALEIGH, N.C. (WTVD) -- President Joe Biden released details Wednesday of a student loan debt relief program, aimed at easing burdens affecting 43 million Americans.
The plan would "forgive" $10,000 in student debt loans, and $20,000 for Pell Grant recipients, available to those who earn less than $125,000 annually or households earning less than $250,000 annually. Furthermore, the White House announced a final extended pause on student loan repayments through the end of the year and capped repayment plans for undergraduate loans at 5% of monthly income.
"An entire generation is now saddled with unsustainable debt in exchange for an attempt at least at a college degree. The burden is so heavy that even if you graduate, you might not have access to the middle-class life that the college degree once provided," said Biden during a news conference.
In North Carolina, 1.3 million borrowers hold about $49 billion in student debt; on average, North Carolina borrowers owe the ninth-most amount of money in the country.
"It causes a lot of stress on me, especially while I'm in school because it's like - wow, I'm going to have an $8,000 loan that was originally $6,200 by the time I graduate. So it's starting to impact me mentally, and physically, and it's kind of like I need to hurry up and get a job or something to help me pay for it," said Bri'Anna Chavis, a junior at Shaw University.
Chavis took the loan prior to transferring to Shaw. She said she was able to make some payments but has found it difficult to contribute more often because of her status as a full-time student.
"I need to figure out another plan work-wise, because I may have to work two jobs. I may have to have a roommate because my plan now is completely flipped around," Chavis said.
Over at NC State, sophomore Kenza Nsanzimana says accessing student loans helped take pressure off her family.
"My mom has other things to pay for so it just didn't make sense to (pay) the full thing without any student loans," said Nsanzimana.
Nationally, Black students are more likely to borrow federal loans, with a report from the Brookings Institution finding they owed on average $25,000 more than their White peers four years after earning a bachelor's degree.
In an experiment of more than 1,000 participants who received different levels of student loan debt forgiveness, those who had higher amounts were able to purchase more and better food, as well as saving for emergencies.
'Debt forgiveness a misleading term'
Nationally, Education Data Initiative reports that student loan debt has more than tripled in the past fifteen years, a rise that has coincided with fast-rising tuition costs.
"I think a lot of these loans and government subsidies, in particular, is a big cause of rising tuition cost. The more you subsidize something, the more you subsidize the tuition, the more you're going to drive up tuition costs. So I think it's actually exacerbating the problem, and then you kind of get into a self-re-enforcing cycle," said Brian Balfour, Vice President of Research at the Raleigh-based John Locke Foundation.
"I think debt forgiveness is a misleading term, because it's not really being forgiven. It's being shifted. That loan, the debt is being shifted away from those who borrowed money to other people, primarily taxpayers," Balfour said.
North Carolina's Senators Thom Tillis and Richard Burr, both Republicans, voiced their displeasure with the plan; the pair were part of five lawmakers that introduced The Student Loan Accountability Act in May, which would prevent the administration from canceling student debt.
"President Biden's announcement that he intends to cancel student loan debt is irresponsible, unfair, and deeply cynical," Burr said. "He's asking taxpayers to subsidize debt held by some of America's highest earners in order to court votes. Every American who paid back their student loans, who put themselves through school by saving and working extra jobs, or who chose not to go to college at all should be outraged right now."
Burr noted that the policy would transfer more than $300 billion of debt onto American taxpayers:
"This move will not solve sky-high college tuitions. This will pour fuel on the fire, increasing college prices and accelerating inflation," Burr said. "It will encourage more schools to increase costs and encourage more students to take out loans they cannot pay back in the hopes they'll never have to do so. The president knows he does not have the legal authority to unilaterally cancel student loan debt but is ignoring the law and bipartisan opposition in Congress. I urge the Senate to pass the Student Loan Accountability Act, which would make Congress' intent clear and prevent future sweeping, unilateral loan cancelation from this Administration."
Harvard Professor Jason Furman, who served as chair of the Council of Economic Advisors under President Barack Obama, shared a Twitter thread with his concerns about the plan, beginning with, "Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless."
The repeated extensions have cost taxpayers $4.5 billion per month and added $103.5 billion to the national debt, according to the Congressional Budget Office.