How does Student Loan Forgiveness help Job Seekers and New Graduates?

Student Loan Forgiveness has become the talk of the town, particularly in the US, where student debts have reached a whopping $1.7 trillion. The main reason behind the mounting student debts is the extravagant costs of higher education. It has compelled thousands of students to take massive amounts of debt that they fail to pay back. To curb the impact of the student loan crisis, the Biden-Harris Administration has announced a solution in the form of the Student Loan Forgiveness Program.

Let’s understand how student loan forgiveness can benefit job seekers and new graduates.

What is Student Loan Forgiveness?

In August 2022, President Jon Biden announced a program called Student Loan Forgiveness to write off federal debts and help millions of student borrowers. Biden Administration is offering forgiveness of up to $20,000. It will enable student borrowers to get their student debt discharged or canceled without needing to pay it back.

Reasons for introducing Student Loan Forgiveness Program 

The fundamental reason for announcing this proposal is to relieve lower-income and middle-income families. It facilitates student debt borrowers who are at a greater risk of delinquency to smoothly transition to repayment.

Many people who have defaulted on paying back their student debt failed to secure a job that could cover their monthly loan payment installments. With the Student Loan Forgiveness program, they can get an opportunity to revive and contribute to economic growth.

Ways in which Student Loan Forgiveness can be Helpful

The Student Loan Forgiveness program is like a ray of hope for new graduates and job seekers stuck in the vicious cycle of increasing student debt and unpaid monthly installments. Once they are set free from the burden of student debt, they get the liberty to choose their profession and follow their passion.

It opens a broad spectrum of opportunities for new graduates who don’t have to settle for any job with an adequate salary that can help them pay back their loans.

Besides, Student Loan Forgiveness can also play a significant role in stimulating the economy. It will allow student borrows to make gainful investments for their future.

Why is student Loan Forgiveness not the best solution for Student Loan Crisis?

Though freeing up student borrowers from debt might seem a big relief, it is not the best solution to handle the student loan crisis. To resolve this issue, we need to find the root cause of this problem; rising unemployment among fresh graduates.

Even after spending millions of dollars on getting higher education, most recent graduates fail to land a job due to their inadequate knowledge and hands-on skills.

Universities are at fault as they do not provide career-focused and industry-centric education as a result many graduates remain unemployed and struggle to repay the debt.

Solutions to Student Loan Crisis

One way to help graduates quickly repay their debt is by making them eligible for lucrative tech jobs. There are plenty of high-paying jobs in the tech industry, but they remain unfilled due to the lack of efficient candidates. So, the state should promote technical bootcamps and vocational schools to prepare the students for the job market. They provide affordable immersive programs that prepare students for high-paying jobs without necessarily acquiring a four-year bachelor’s degree or Masters's degree.