Remarks by President Biden Announcing Student Loan Debt Relief Plan
Roosevelt Room Washington D.C. August 25, 2022 2:46 P.M. EDT
THE PRESIDENT: Hey, folks. Well, good afternoon. When America made 12 years of public education universal in the last century, we became - not figuratively, literally - the best-educated public in the world and better prepared than any other nation. And I would argue that it's one of the reasons why we were so successful and have been so successful.
But as you've all observed, other nations have caught up. In the 21st century - in my view and I think the vast majority of Americans' - 12 years of universal education is not enough, and we're going to be outcompeted by the rest of the world if we don't take action.
But here's the deal: The cost of education beyond high school has gone up significantly. The total cost to attend a public four-year university has tripled - nearly tripled in 40 years - tripled.
Instead of properly funding public colleges, many states have cut back their support. We were just talking about that in the Oval. Many states have cut back support for their - their state universities, leaving students to pick up more of the tab.
In 50 years - for 50 years, Pell Grants have been a key way for the federal government to help lower-income families, particularly those earning less than $60,000 a year, to send their kids to college.
Those Pell Grants used to cover 80 percent - 80 percent of the cost of going to a public four-year college.
Today, Pell Grants cover 30 perce- - 30 - roughly 32 percent. That's one third of the cost, as opposed to before.
I remember walking up - my dad, like probably a lot of your folks, cared a lot about your education. My dad's greatest regret was that he never got to go to college. And my dad was a very well-read man, particularly history and - but it was a great regret -
And he'd always say, "Joey, you're going to be a college man." And I'd say, "Dad, but - well, what does that ma- - I mean, you can still get fired if you're a college man."
He said, "Yeah, but they can never take it away from you. They can never take your education away."
And I remember: My senior year, I got into one of the little Ivies and I got into a number of schools, and we were trying to get the money, even with financial assistance, to be able to go there. We had four kids, all of - all of us wanting to go to school.
And I remember going down after a baseball game - I went to a really good school up in Claymont, Delaware, on the Pennsylvania border. And I drove down to Newark, Delaware. My dad worked at an automobile agency. And I walked in, and I had my spikes and - because the reason I was going down - when your dad works at an automobile agency, you have a great advantage: You get a new car to go to the prom or a u- - a good used car. You thinking I'm joking. I'm not joking.
And so, I went down in my '51 Plymouth with beach towels for seat covers, and I had my uniform on, my spikes off. I ran in and the woman whose name was Mary, who ran the place - I said "Mary, where's Dad?" She said, "He's out in the lane going into the repair shop." I give you my word, true story.
And my dad was a well-dressed, refined fellow. And I walked out, and my dad was pacing back and forth between the big garage door going into the - into the repair shop and the door going out of the ro- - showroom.
And he looked up. He said, "Oh, Joey, honey, I'm so sorry. I'm so sorry."
And I thought, "God, something happened." This was before cellphones. I thought something happened to one of my brothers or my sister or my mom or something.
I said, "What's the matter, Dad?" He said, "I went to see..." The guy's name was Charlie Delcher, who was the vice president of the Farmers' Bank, which was a state-owned bank that did a lot of the financing of people wanting to purchase a car.
He said, "I went to Charlie and asked to borrow the money." He said, "He won't lend it to me." He said, "I'm so ashamed. I'm so damn ashamed."
You know, my dad would - you know, my dad was like millions of parents all across the country who want to help their kids to get to school, but there was just no way to be able to do it.
You know, and - because he believed, as I do, that an education is a ticket to a better life.
That's something Jill and I, Kamala and Doug, we - we understand deeply. I'm sure the vast majority of you do as well.
But over time, that ticket has become too expensive for too many Americans.
All of - all of this means is the entire - 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 may not have access to the middle-class life that the college degree once provided.
Many people - many people can't qualify for a mortgage to buy a home because the debt they continue to carry. They - you know, they carry - it's too high. They can't come up with a down payment anyway.
A lot of folks are even putting off starting families because of the cost. And the dream of starting or owning your business is just way off in the distance with a debt that's - that so many are saddled with.
Many of you had to leave school because the financial strain was much too high. About a third of the borrowers have debt but no degree and - worst of both worlds: debt and no degree.
The burden is especially heavy on Black and Hispanic borrowers, who on average have less family wealth to pay for it. There's no - they don't own their homes to borrow against to be able to pay for college. And the pandemic only made things worse.
But we responded aggressively to the pandemic to minimize the economic impact of the harm that COVID imposed on individuals, families, and businesses. You all were there. It was recovery.
Look, we increased unemployment benefits for workers who were laid off. We provided loans to small businesses so they can stay afloat and take care of their families and their employees. We provided assistance to people to put food on the table.
Remember those long lines you guys would all film of cars - decent-looking cars, not jalopies; you know, nice cars - just waiting for a box of food to be put in the trunk? In the United States of America, waiting for over an hour to get food in a trunk.
And we provided rent and mortgage assistance to keep people from being evicted and thrown out on the street.
Our approach to help Americans who need it the most was necessary, and it was the right thing to do. And it helped people avoid financial crisis, which helped our whole country as a consequence of that. That didn't benefit them; it benefitted the whole economy.
Our approach is why America's economic recover- - economic recovery was faster and stronger than any other advanced nation in the world.
Now it's time to address the burden of student debt in the same way.
Working closely with the Secretary of Education - he's got the hard job - you know, Secretary Cardona, here's what my administration is going to do: provide more breathing room for people so they have less burden by student debt and, quite frankly, to fix the system itself, which we came in and we both acknowledged was broken, in terms of - anyway.
There are three key factors of what we're going to do today.
First, we've made incredible progress advancing America's economic recovery. We've wound down pandemic relief programs like the ones for unemployment insurance and small businesses. It's time we do the same thing for student loans.
Student loan payments pause is going to end. It's going to end December thirty- - I'm extending to December 31st, 2022, and it's going to end at that time. It's time for the payments to resume.
Second, when I campaigned for President, I made a commitment - I made a commitment that we'd provide student debt relief. And I'm honoring that commitment today.
Using the authority Congress granted the Department of Education, we will forgive $10,000 in outstanding federal student loans.
In addition, students who come from low-income families which allowed them to qualify to receive a Pell Grant will have their debt reduced $20,000.
Both of these targeted actions are for families who need it the most - working and middle-class people hit especially hard during the pandemic making under $125,000 a year. You make more than that, you don't qualify.
No high-income individual or high-income household, on top of the 5 percent - in the top 5 percent of incomes, by the way, will benefit from this action. Period. In fact, about 90 percent of the eligible beneficiaries make under $75,000 a family.
Here's what that means: If you make under $125,000, you'll get $10,000 knocked off your student debt. If you make under $125,000 a year and you received a Pell Grant, you'll get an additional $10,000 knocked off that total for a total of $20,000 relief.
Ninety-five percent of the borrowers can benefit from these actions. That's 43 million people.
Of the 43 million, over 60 percent are Pell Grant recipients. That's 27 million people who will get $20,000
in debt relief.
Nearly 45 percent can have their student debt fully cancelled. That's 20 million people who can start getting on with their lives.
All of this means people can start to finally crawl out from under that mountain of debt to get on top of their rent and their utilities, to finally think about buying a home or starting a family or starting a business.
And, by the way, when this happens, the whole economy is better off.
In the coming weeks, the Department of Education will lay out in detail a short and simple form to apply for this relief along with information when the application process opens.
By resuming student loan payments at the same time as we provide targeted relief, we're taking an economically responsible course.
As a consequence, about $50 billion a year will start coming back into the se- - the Treasury because of the resumption of debt.
Independent experts agree that these actions, taken together, will provide real benefits for families without meaningful effect on inflation.
Let's be clear. I hear it all the time, "How do we pay for it?" We pay for it by what we've done.
Last year, we cut the deficit by more than $350 billion.
This year, we're on track to cut it by more than $1.7 trillion by the end of this fiscal year. The single-largest deficit reduction in a single year in the history of America.