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Democrats from across the party’s ideological spectrum are calling on President-elect Joe Biden to make forgiving student loan debt one of his first priorities in office.
The total outstanding student loan debt held in the U.S. has more than tripled over the past 15 years as the cost of education has skyrocketed. Americans now owe more than $1.7 trillion in student loans, a figure that was considered a crisis by many experts even before the financial collapse caused by the coronavirus pandemic.
Biden recently said he supports proposed legislation that would forgive $10,000 in student loan debt for all borrowers. Many on the left want him to go much further and to not rely on Congress to get it done. Sen. Elizabeth Warren, Senate Minority Leader Chuck Schumer and a number of other prominent Democrats have called for Biden to forgive up to $50,000 per person through executive action, a move that would completely eliminate the balances of 75 percent of all borrowers.
Biden, who campaigned on a plan to expand loan forgiveness and dramatically lower the cost of a college education, has not commented on his colleagues’ more ambitious proposal. He also hasn’t indicated whether he’d be willing to bypass Congress to put a debt forgiveness plan into action.
Why there’s debate
Supporters of student loan debt forgiveness say the enormous financial burden of loans, many with onerous interest rates, make it impossible for college graduates to get ahead. Relieving that burden would also help reduce the racial wealth gap because people of color tend to borrow more money and have more difficulty paying it back, they argue. Though forgiveness would directly affect only about 45 million Americans, it would provide an economic boost that benefits everyone, supporters say.
Opponents argue that student debt forgiveness would be unfair to the majority of Americans who don’t carry school debt, either because they paid theirs off or they chose not to go to college. A broad forgiveness program would help rich people far more than poor people, since the majority of student loan debt is held by high-income households, they argue. Clearing existing debt would also do nothing to address the overwhelming costs of higher education. Others doubt eliminating student loan debt would bolster the economy as much as supporters say it would.
Some experts agree that loan forgiveness has its drawbacks but believe it may be the best option given current circumstances. The country desperately needs some sort of major intervention to help the economy get back on its feet, they argue. With congressional Republicans unlikely to approve any other significant measures, clearing student loan debt via executive order could be Biden’s only opportunity to take decisive action to help many struggling Americans. There is also debate over whether a smaller, targeted forgiveness plan is better than a massive move that clears most or all student loan debt.
In March, the Trump administration ordered the Department of Education to suspend payment requests and halt interest on all federal student loans in response to the pandemic. Those provisions are scheduled to expire at the end of the year. President Trump hasn’t indicated whether he will extend the program. Biden also hasn’t said whether he’d put it back in place if Trump allows it to expire.
Crippling student loan debt is holding an entire generation back
“Even as getting millions more Americans into college has had tremendous social value, this metastasizing debt crisis has had tremendous social costs. An entire generation has been set back: Millennials are on track to be the first generation in modern history to end up poorer than their parents.” — Annie Lowrey, Atlantic
All Americans would benefit indirectly
“Student loan forgiveness won’t solve all the problems we are facing, but it will ease a significant burden for tens of millions of people. It will stimulate the lagging economy. And though not everyone will directly benefit, the country as a whole will improve.” — Roxane Gay, New York Times
Loan forgiveness would reduce inequality
“Cancellation will disproportionately impact Black and Brown borrowers, low income borrowers, and female borrowers … because of the history of discriminatory policies … in the financial marketplace that continue to this day.” — Ashley Harrington, federal advocacy director at the Center for Responsible Lending, to Yahoo Finance
Loan forgiveness may not be the best solution, but it’s the only one that’s possible
“Unilaterally forgiving student debt without enacting deeper reforms to how we pay for college is an awkward, temporary fix that could bring up perilous political and legal issues. But right now, it would be a mistake for Biden to rule it out entirely: In a world where only third- and fourth-best policy options are realistic, we may be talking about a mediocre idea whose time has come.” — Jordan Weissmann, Slate
We shouldn’t let the selfishness of some people block policies that would help millions
“The argument against student debt forgiveness is essentially: ‘Why should my city pay for lifeguards when I know how to swim?’” — the Root writer Michael Harriot
An expensive college degree is increasingly necessary in many career fields
“Degree inflation means that a bachelor’s degree has become a minimum qualification for a growing number of jobs, so the rising expenses associated with a college education have broad implications. For many of us, there’s no way up without debt.” — Sarah Jones, New York
Debt relief should be reserved for those who need it most
“Many student-borrowers need relief, but well-off borrowers who are thriving — thanks, no doubt, to their college degrees — do not.” — Adam Looney, Washington Post
Student debt forgiveness would be a political disaster for Democrats
“I think Dems are wildly underestimating the intensity of anger college loan cancelation is going to provoke. Those with college debt will be thrilled, of course. But lots and lots of people who didn’t go to college or who worked to pay off their debts? Gonna be bad.” — The Week columnist Damon Linker
There are more effective ways to help poor Americans
“Think about it this way: If you only have $1.5 trillion to spend, what policy would help the most people actually struggling right now? I don’t think canceling student loans would rank in the top 20.” — Jonah Goldberg, New York Post
Loan forgiveness would do little to boost the struggling economy
“For one, forgiving student loans spreads stimulus out over time instead of pushing it all out at once because it eliminates a monthly payment. A borrower who owes $200 a month would get the same amount of relief this month, in the middle of an economic downturn, as they would when the crisis is over.” — Niv Elis and Sylvan Lane, The Hill
Loan forgiveness would be a handout to the well-off
“The student debt crisis has been driven mostly by students at graduate programs and selective schools, who overwhelmingly fall into affluent and high-income populations. As a result, canceling student debt would cost billions of dollars each year and would exacerbate, not lessen, economic inequalities.” — John Kristof, RealClearEducation
The problem of student loan debt is grossly overstated
“The very notion of a student debt ‘crisis’ itself is overblown in its premise. The average student loan payment is between $200 and $300. That is not a crisis — it is an inconvenience, one that responsible young adults should certainly be able to handle without offloading their debts on to working-class taxpayers.” — Brad Polumbo, Washington Examiner
People with student loan debt knew what they were signing up for
“College students can choose whether to accept debt, just as they can choose majors that are more likely to lead to income-generating jobs. It is not the government’s job to step in and rescue those who took on more debt than their future incomes would support.” — Editorial, Pittsburgh Post-Gazette
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