Student loan debt can be a heavy burden for current and former college students as tuition costs continue to rise in the United States. College tuition for both four-year public and private institutions has nearly tripled since 1980, according to the U.S. Department of Education.

President Joe Biden’s executive order, announced on Aug. 24, will forgive up to $20,000 of student loan debt for Pell Grant and non-Pell Grant recipients earning less than $125,000 per year or $250,000 per year for married couples. People who fall under this criteria can take advantage of this policy and better their future to avoid feeling chained at the ankles to their debt. But some experts warn it shouldn’t be treated as a total get-out-of-debt-free card.

“This kind of ‘debt relief’ can create a problem that is called a ‘moral hazard problem,’” Dr. Gary Wagner Ph.D., Board of Regents Support Fund (BORSF) Endowed Chair in Economics from the University of Louisiana at Lafayette’s Economics and Finance Department said.

A moral hazard problem occurs when people start to behave differently than they normally would because they believe they might be free of consequences. For example, if someone is pulled over for speeding and let off with only a warning, they’ll probably speed more often.

“People may now attend college and borrow more money with the expectation that, at some point in the future, it is going to be forgiven,” Wagner said. “It can now alter your behavior in a way that it wouldn’t have altered it if you expected that you were going to have to pay it back.”

Biden’s executive order may not lead to more forgiveness in the future. According to Wagner, it is possible the student loan forgiveness policy can be reversed in the future, and students may be faced with the inequity of graduating during a period where the current president chooses not to forgive student loans.

UL Lafayette’s Interim Chief Diversity Officer Kiwana McClung’s efforts in establishing diversity, inclusion and equity initiatives have been nationally recognized. During the university’s Eminent Faculty Awards, McClung received a Leadership Service Award from the UL Lafayette Foundation.

McClung says Biden’s plan may not make people feel incentivized to attend college, but it shows that the U.S. government has an interest in supporting people’s education.

“It ensures that we have a workforce that is able to handle the demands of our world and the people that we serve,” McClung said. “When it comes down to it, a lot of our essential professionals need a college degree.”

McClung can see why the government would want to provide forgiveness. She says that if we need more workers from a particular industry, such as doctors, nurses or lawyers, we need to make sure that they have affordable education.

“This does not solve all of your debt problems,” McClung said. “You’re still going to have debt, and I think that it is extremely important for students to be financially literate, understand what their goals are, understand the financial obligations of those goals and have a plan in place.”

Both McClung and Wagner agree, it is important that students and graduates take advantage of the relief and the opportunity they’ve been given. People can put the money that has been forgiven towards financial literacy, career resources, living arrangements and everyday necessities.

Current and former students are already putting their plan in place.

The $10,000 in student loan forgiveness can not only make a huge impact on people’s day-to-day lives, but it can increase earning potential for people who need essentials for day-to-day work life.

“I might not have to use my mom’s car anymore,” Sarah Comeaux said, a 2021 Nursing Graduate from UL Lafayette. “I can actually start looking at more options for buying a new car.”

Students looking to further their education may have a few more options to consider. This plan will give some students the ability to pursue a master’s degree, doctoral degree, certification program, and other graduate programs to improve their career path.

“It’s a pretty big deal for me, you know,” Trent Billeaud said, a marketing major in his senior year at UL Lafayette. “I was planning on getting an MBA degree after I graduate and, now that I don’t have to pay back as much, I can probably look at programs like Tulane or LSU or Texas A&M.”

Additional organizations that can help people manage student loan debt are the Education Department’s Public Service Loan Forgiveness program, the NURSE Corps Loan Repayment Program and the National Guard’s Student Loan Repayment Program.