President Biden campaigned on the promise of reducing student loan debt and the price of higher education — two factors that prevent many borrowers from saving for retirement, purchasing a home or paying off other debt. The cost of college has tripled in the past 20 years, with an annual growth rate of 6.8 percent. The Biden administration aims to make a college education more obtainable, even free in specific situations, for students of all socioeconomic backgrounds.
Key takeaways: Biden’s proposals
- Free tuition at public universities or colleges for families with an annual income of less than $125,000.
- Free tuition for the first two years of community college.
- Invest in grants to HBCUs, TCUs and under-resourced MSIs.
- Double the value of Pell Grants.
Biden seeks to make college more affordable for some students
Making college affordable to low- and middle-income families was identified as one of Biden’s goals during the campaign due to the rising cost of a college education. The Biden Plan for Education Beyond High School states that “in today’s increasingly globalized and technology-driven economy, 12 years of education is no longer enough for American workers to remain competitive and earn a middle class income.”
In Biden’s plan, students who attend a community college would not be responsible for paying tuition for the first two years, and if the student or the student’s family makes less than $125,000 annually, tuition would be free at a public university or college.
While community college does cost less than a standard four-year institution, it’s not affordable for all students. The cost of community college has risen 46 percent in the past 20 years, with the average annual cost in tuition and fees for a full-time, in-district student averaging out to $3,730. Alleviating even some of this price may encourage students to attend college when they once didn’t see it as a possibility.
The notion of free community college isn’t a new idea; there are currently 17 U.S. states that offer free community college programs for students who meet the state-specific eligibility requirements.
Biden will most likely go through Congress for legislation
In order for any of the legislation to pass, one of two things must happen: either President Biden must enact an executive order or the bill must go through Congress. Biden has expressed that he is more likely to go through Congress, since he has limited power on his own when it comes to lowering the cost of college. “Executive orders can be used to tweak the execution of existing federal programs, but a free college program would require an act of Congress,” says Shannon Vasconcelos, director of college finance at Bright Horizons College Coach.
“With Democratic control of both the House and Senate, the prospect of some sort of free college program is likelier now than it has been in recent memory,” Vasconcelos adds.
However, it will still be a challenge to pass this into law, with Republicans historically opposing student loan forgiveness and free college proposals. “As long as the filibuster remains in place, a free college proposal would likely require unanimity among Democrats and at least some Republican support, and that may be a challenge to ascertain,” she says.
Students should still prepare for tuition costs
When it comes to free or reduced college proposals, keep in mind that even if they do become a reality, the benefits likely will not apply to every family. Therefore, it is imperative that families not rely on potential legislation, says Joe DePaulo, CEO and co-founder of College Ave Student Loans. “In order to not be ‘caught out in the rain’ with four years (or more) of college expenses, the best bet is for families to continue to save and make a solid plan on how to cover the cost of a college degree.”
This is particularly true while the COVID-19 pandemic continues. A recent College Ave Student Loans survey found that of those planning to help their child pay for college, 52 percent said that the pandemic will make it more difficult to pay for college this fall.
When it comes to making college more affordable, you have options. Apply for what you can in federal aid and be on the lookout for grants and scholarships offered by your school. If you’re applying for private student loans, shop around to make sure that you’re receiving a competitive rate.