After two years at Slippery Rock University, Elizabeth Szczerbiak, a sophomore, said she’s accrued more than $20,000 in student loan debt.

For students like her, a student loan forgiveness plan is a celebrated financial change in the education system.

“I’m happy about it; it’s a step in the right direction. Student loans are a big part of the debt in this country, and a lot of people are not taking steps toward education because of the cost,” she said.

On Wednesday, Aug. 24, the Biden administration announced student loan forgiveness of up to $20,000 for the nation’s qualified students past and present.

President Joe Biden said in a news conference that students who received a federal Pell Grant will have up to $20,000 of debt forgiven, while individuals who earn less than $125,000 a year or less than $250,000 a year as a couple will have $10,000 of debt forgiven.

“Pell Grants used to cover 80% of a four year degree, now it covers around 32% of a four-year degree,” President Joe Biden said. “Our approach to help the American needs was necessary.”

Biden also stated that the pause for student loan payments will end Dec. 31 of this year.

SRU students and residents of Butler who have graduated college polled all agreed the impact of the debt forgiveness was significant.

Garret Polka, a junior physical education major at SRU, said he feels even the minimum forgiveness will relieve stress for students.

“I think it’s a good thing; it’s necessary,” he said. “I’m guessing I have over $30,000 or $40,000 in loans so far.”

Sophomore Bethany Krut said the cancellation of those costs would have a positive effect on students to come.

“This is good, but I feel like it’s not going to end up happening,” Krut said. “People in office make promises they don’t keep all the time. (Student debt) has been an issue for generations with increased cost and not enough income to support those expenses.”

As she plans her academic future, Krut said she plans to pursue grad school. Her nearly $30,000 in student debt will increase as her education continues, and $10,000 canceled could have an impact.

“If it actually happens,” she said.

Emma Christley, a graduate of Point Park University in 2021 and resident of Butler Township, said she her debt for her four-year degree is $17,000. As she prepares to leave for a graduate program in Scotland in September, those loan costs will increase.

She said $10,000 of relief is a drop in the bucket.

“This will definitely help a lot of people, but interest is still accruing on those loans, and that’s really the issue,” she said. “Ten thousand is a great start, but the better solution is 0% interest. I hope that comes through the pipeline.”

For Alyssa Dobson, SRU director of financial aid, the student loan announcement made today “a great day.”

The various components of the student loan policy announcement will impact SRU students and graduates in positive ways, she said.

“(The loan forgiveness) is especially impactful for those students with a small loan balance, who maybe didn’t or weren’t able to finish their degree, because they wouldn't necessarily have the tools to be as economically viable to repay those loans,” she said.

At SRU, Dobson said, approximately 90% of students utilize some form of student loans. Average debt at graduation is $33,000.

The final pause in student loan repayments until Dec. 31 will give students some time to plan, she said.

“For students who are out of Slippery Rock, I think what it does is allow for a gradual onboarding of repayment to begin,” Dobson said. “It will allow for enhanced communication from loan servicers and also allow for a new calculation of repayment, because all of these announcements sort of play together.”

The changes to income-based repayment plans, she explained, work to solve some existing problems within the student loan system, at least for undergraduate loans.

“There’s a calculation that occurs when you sign up for income-driven repayment,” she explained. “The first part of that calculation is how much of your income is protected — how much you get to keep before they determine your payment amount. That’s increasing. You get to keep more of your income before they even calculate the payment.”

The second part of the calculation, she said, is the monthly payment, the cap for which is now decreasing from 10% of a borrower’s monthly discretionary income to 5%.

“Your payment is going to be smaller on an income-driven repayment than it was previously,” she said.

The decision also prevents loan balances from growing if borrowers on income-driven plans make their monthly payments, even if their amount for the month doesn’t cover interest because their income is so low.

“There’s a fairly widespread and known problem and issue with the student loan program, which is that if you do sign up for an income-driven repayment plan, your balance can grow, which is worse than treading water — that's sinking,” Dobson said. “What is going to happen there is the government will essentially pay that portion of interest, to prevent a situation where you are making on-time payments and your loan balance grows.”

Overall, Dobson feels the changes will help students be able to focus on earning an education.

“It’s a big decision, when they enter school; a lot of them are faced with really no option than borrowing in order to achieve their goals,” she said. “Knowing when they are done that repayment is going to be manageable goes a long way for students as they’re making the decision to pursue higher education.”