Student loan forgiveness has been a hot topic for quite some time. And it has generally not moved past heated conversations and debates. As each administration inches closer and closer from conversation to legislation, Biden is expected to take action on $1.7 trillion in student loan debt for about 43 million Americans. While not proposing to cancel the entire amount, Biden plans to cancel $10,000 federal students’ debt per borrower – the $10,000 forgiveness could wipe loans for some 16 million students, despite their level of income.
The cancellation includes tuition fees for the students who graduated from public colleges, historically black colleges and universities, minority-serving institutions, and those who earn less than $125,000 a year. earning under 125,000 per year
The student loan debt in the United States is capped at $1.7 trillion. Biden’s plan is not necessarily to eliminate this entire amount. Rather, he wants to mitigate the debt to millions of borrowers that will put more money in their pockets, which will, in turn, give them the spending power needed to stimulate the economy — an economy that is already stifled by the pandemic, making it more cumbersome to pay off student loans.
Millions have lost their jobs during this pandemic, unable to cover the essentials. And even for those that have been spared in paying their rent for some time, they’re not completely off the hook, as they have to eventually make those missed payments. And it may be years before Americans can get back on their feet comfortably post the pandemic. And continuing to pay student loans during this process adds another layer of burden some cannot handle.
“Student debt is not a result of bad decisions or behavior; it is the result of a broken system that tells students to get an education or go to college to have a stable life but then does not provide the resources to afford that education,” says Congresswoman Ihan Omar.
Omar argues that the U.S has a two-tiered system: the rich and the middle/poor class. She says that the rich will have money for more outstanding education, while the middle and poor classes will have to pay off loans for the rest of their lives. So the first step is to “cancel up to $50,000 in student debt for federal loan borrowers,” she says. Omar, along with Bernie Sanders and Alexandria Ocasio-Cortez, remain hopeful for President Biden to use his executive authority to cancel student loans. But there’s still a long way to go to get Biden fully on board.
Biden said that he was not aiming to eliminate $50,000 in student loan debt via executive order, progress frequently pushed by many of his democratic partners. He did not include student loan forgiveness in his $6 trillion budget nor his COVID relief plan.
“I don’t think that it’s going to be a huge number because of the budgetary realities around it,” Biden said. “I do think we can see a bill where we have [$5,000 to] $10,000 in cancellation for federal student loans.”
While Democrats currently control the Senate and the House, Congress still lacks the votes needed to pass the student loan forgiveness bill. However, Congress has included a provision that would make student loan cancellation tax-free through December 31, 2025, which includes both private and federal student loans.
While Biden may not be fully convinced to forgive the amount of student loans that his democratic partners are urging, he has proposed to invest $85 billion in the Pell Grant program to increase the maximum grant by $1,400 a move that may placate some of his left wing counterparts.
