Financial Insights

Student Loan Relief Preview

Having just finished two college drop-offs for my own children, the cost of college attendance is acutely on my mind.  My guess is that, even if the cost of college tuition does not affect you directly as you are reading this, the chances are that you may know someone who is impacted.

Forty years ago, federal support via Pell Grants covered roughly 80 percent of the cost of four-year public and private school tuition.  Today, it covers maybe one-third.



This has resulted in many students from low and middle income families with no choice to borrow if they want a degree.  It’s also left many with outstanding debt and no degree at all because they could not afford to complete their degree.  Student debt particularly impacts the long-term finances of those from low and middle income households.

The planning impact of this reality is that there are 45 million borrowers in the U.S. with a cumulative $1.6 trillion in federal student loan debt.  The debt burden makes it difficult for borrowers to build wealth through buying homes, saving for retirement or by starting a business.

President Biden’s debt relief announcement last week satisfies a campaign promise and reinforces his personal belief that a post-high school education should be a ticket to a middle class life.

The three-part plan he announced is focused on the following:









The last provision is arguably to most difficult to enforce and has led to speculation that colleges will simply raise the cost of tuition in response to more favorable borrowing conditions.

Plenty of additional details have been shared in the media and are available online.  In addition, more information on claiming relief will be available to borrowers in the coming weeks.

We’ll be following the details and share more to the extent that it is helpful and we will continue to help our clients with plans to save for college tuition for their children and grandchildren.

Importantly, if you know any borrowers who may benefit from the announced debt relief plan, then you can share with them that they can sign up to be notified when additional information will be available and when the process officially opens by clicking here.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.


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