Student Loan Debt Relief Is Trending But What Can We Expect From An Incoming Biden Administration?
We still have over two months until President-Elect Joe Biden takes office on January 20, 2021. However, that hasn’t prevented people and pundits from discussing what needs to change (and how quickly) once he’s sworn in.
Obviously, the new president will have a lot on his plate. Thanks to an unprecedented four years under a Trump Administration which has largely gutted several government agencies and enacted dangerous policies for Americans, Biden will have to act quickly and decisively.
One possible agenda item for Biden’s first days in office involves the student loan debt crisis. Currently, our collective student loan debt stands at $1.7 trillion (the second largest debt behind mortgages), so it’s no surprise that the Biden team are looking to address the crisis.
Biden signals he’s open to student loan debt relief but is it enough?
During a Monday press conference, President-Elect Biden confirmed his support for forgiving some student debt “immediately.”
He repeated his support for a provision passed as part of the HEROES Act, which the Democratic-controlled House updated on Oct. 1. The provision calls for the federal government to pay off up to $10,000 in private, nonfederal student loans for “economically distressed” borrowers. Biden specifically highlighted “people … having to make choices between paying their student loan and paying the rent,” and said the debt relief “should be done immediately.”
However, many point to it as a plan he can execute quickly and on his own. Attorneys at a Harvard legal clinic argue that the power to cancel federal student loan debt rests with the president and his or her education secretary, since it’s the Education Department that actually originates these loans. That means it can be done regardless of who controls the Senate without passing any new laws.
According to many experts, canceling student debt could have a major positive impact on the economy.
Although it sounds like forgiving student load debt would be an easy move, some are asking should it be done? Most economists agree that canceling student debt will boost the economy, freeing up younger people to start businesses, buy homes and even start families.
In fact, Elizabeth Warren, in her presidential campaign proposal, cited arguments that debt forgiveness would reduce the racial wealth gap, reverse rural brain drain and allow more people to complete their educations.
Activist groups such as the Debt Collective go further, arguing that student debt is wrong in principle. “We must return education to the status of a public good,” the organization says on its website.
Progressives like AOC and ‘The Squad’ are pressuring Biden to expand his plan.
The Squad (the nickname given to Reps. Alexandria Ocasio-Cortez of New York, Ilhan Omar of Minnesota, Ayanna Pressley of Massachusetts, and Rashida Tlaib of Michigan) have strongly supported wiping $30,000 off student loan debts, which they outlined in their Student Debt Emergency Relief Act in March.
The bill aims to provide immediate monthly payment relief to those who have taken out federal student loans and crucially prevent those with student debts from having to make involuntary payments during the coronavirus pandemic.
And in response to many who are against the idea, AOC had the perfect clap back. In a tweet on Tuesday, she dismissed arguments against canceling hefty debts accrued in further education.
“‘Things were bad for me, so they should stay bad for everyone else’ is not a good argument against debt cancellation – student, medical, or otherwise. #CancelStudentDebt,” Ocasio-Cortez wrote.
Rep. Ayanna Pressley further contributed to the debate, adding: “Student debt cancelation will ensure an equitable economic recovery from COVID-19, jumpstart our economy & close the racial wealth gap. One more thing,” she said.
But why are so many others so upset about canceling student debt?
Many opposed to canceling student debt claim that it would create resentment in those who spent a long time paying off their own college debts. The argument goes that they had to sacrifice and suffer and it wouldn’t be fair that current and future college grads might not have to sacrifice and suffer in the same way.
Other critics of debt forgiveness state that a bailout will simply redistribute the debt to other Americans, and will largely benefit those who can afford to go to college, disproportionately helping a well-off segment of society at the expense of the taxpayer.
Something those people should keep in mind, though, is that their experience of massive student loan debt is not one shared by every generation of students. From 1988 to 2018, the cost of college increased by 213%. Wages, unsurprisingly, did not increase by 213% in that period — in fact, they’ve pretty much remained stagnant since the 1970s.
Perhaps most importantly, canceling student debt doesn’t negatively affect those who’ve already paid off their student loans. Insisting that other people pay off their loans in full, no matter how much of a hardship, is demanding suffering for the sake of suffering.
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