Paying for college may get a lot easier for many American families if President Biden gets his way.
Biden formally announced his American Families Plan on April 28. While the Plan includes several policies intended to aid those in the workplace, including paid family leave and universal preschool, it also includes provisions that could reshape the American higher education system and make college much more affordable for many families.
Here are the highlights:
- Free community college: Community college tuition and fees would be covered for all Americans, including DACA, or Deferred Action for Childhood Arrivals, program recipients. You could use the benefit over three years and up to four years if circumstances warrant.
- Larger Pell Grants: The maximum Pell Grant award would rise by $1,400 to $7,895. The Plan also would make DACA recipients eligible for Pell Grants.
- Aid for HBCUs, TCUs, MSIs, and their students: The Plan would subsidize two years of tuition at historically Black colleges and universities, tribal colleges and universities, and other minority-serving institutions for students from families earning less than $125,000 a year. It also would provide $5 billion to strengthen programs in high-demand fields at these schools.
At the core of Biden’s college plan is that it should reduce the strain that higher education puts on many American’s personal finances by making college more affordable as well as decreasing the amount of debt and the number of students who have to take out student loans to complete college. This should be particularly impactful in communities of color.
Thomas Hudson, president of Jackson State University in Mississippi, says decreasing college costs and the burden of student debt would change the landscape for HBCUs.
“One of the factors in lower retention rates is finances — students just not being able to afford college year to year,” Hudson says. “What it does is it traps students in a pretty tough cycle of debt where they are paying more for their education, and it puts them in a state where they have to go further into debt, or they have to take (semesters off).”
About 45% of high school graduates enrolling in a four-year college in 2021 are expected to take on student loans. Those who get a bachelor’s degree from a four-year public college could graduate with an average of $38,147 in student loan debt, according to a NerdWallet study.
The American Families Plan is an ambitious piece of legislation, and it is still a long way from becoming law. If and when it does, there is no guarantee that the sections regarding college aid will pass as currently proposed.
If you are planning to go to college before the Plan passes in some form, consider existing options for getting a degree or credential without racking up large student debt. Try to take advantage of all scholarships and other forms of aid that you don’t have to repay. Use federal student loans carefully and resort to private student loans only to fill a gap.
The post What Could Biden’s College Plan Mean for You and Your Family? appeared first on Business Forward!.
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Author: Steve Goodman
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