Please note: This post is simply meant to act as an announcement. Therefore RxTeach is not presenting its opinion regarding the efficacy, ethics, legality, or political discourse around this topic. For those perspectives, consider reading this post from the Tangle Newsletter, which provides a summary of opinions from the political right, left, and middle.
On Wednesday, August 24th 2022, college graduates across the US woke up to breaking news regarding student loan relief. The Biden administration and the US Department of Education officially announced that they will provide up to $10,000 of debt cancellation for non-Pell Grant recipients and up to $20,000 of debt cancellation for Pell Grant recipients.
Eligibility for this relief program is based on earnings, and you must make less than $125,000 individually or less than $250,000 for households in order to qualify.
If you're wondering what a Pell Grant is, they are federally awarded grants typically reserved for undergraduate students who display outstanding financial need and have not earned a college degree. The average Pell Grant award is roughly $4,500, however, they max out at $6,495. Over half of Pell Grants are given to students from families earning less than $20,000 a year.
Additionally, the pause on student loan repayments has been extended, seemingly for the last time, until January 2023. The pause on student loan repayments started under the Trump administration and has been extended 7 times (3 under Trump; 4 under Biden).
What could this mean for PharmD graduates? According to the American Association of Colleges of Pharmacy, roughly 85% of pharmacy students borrow money to pay for their education, and the average student loan debt is $166,528 by the time these students earn their credentials. So, the average debt would immediately drop to somewhere between $166,528 and $146,528 for PharmD graduates depending on salary and Pell Grant status.
The effect this will have on future PharmD student debt is unknown, though time will tell. There's a lot of debate around how this forgiveness will affect the cost of college going forward, current rates of inflation, taxes, and about a million other things. In fact, the legality of this policy is also being hotly debated, given that the Biden administration is utilizing the HEROES Act in a way that Congress didn’t initially intend. Of note, the HEROES Act is the same legislation that the Trump administration initially used to pause student loans in the first place.
You can expect to hear from us again regarding student loan forgiveness and its effect on pharmacy students as potential court cases take place, assuming a party comes forward with standing to sue. We will also start to cover strategies for student loan repayment in future posts, regardless of whether or not loan forgiveness is overturned. Stay tuned!