Biden Administration Looks Into Student Loan Cancellation

By Dane Homac on February 14, 2021

On February 4, 2021, White House Press Secretary Jen Psaki tweeted that in addition to continued support for canceling student debt, President Biden “is reviewing whether there are any steps he can take through executive action and he would welcome the opportunity to sign a bill sent to him by Congress.” President Biden and the newly formed Democratic Majority in the Senate have publicly stated their support for addressing the roughly 1.6 trillion dollar student loan crisis throughout the 2020 Election Cycle.

Now, key Senate Democrats like Majority Leader Chuck Schumer continue to put pressure on Biden to cancel student loans in the amount of $50,000 per borrower as opposed to $10,000 per borrower, an amount the Biden Administration has claimed to be comfortable with. President Biden has publicly stated that borrows are in “real trouble” and that “they’re having to make choices between paying their student loans and paying their rent…” On his first day in office, President Biden extended the forbearance period on federal student loans through September 2021 through executive action.

Tweet from Jen Psaki, White House Press Sec.

As COVID-19 proceeds to ravage the U.S. economy, policymakers have continued negotiating various forms of economic relief like direct payments to Americans, increased and extended unemployment insurance, rental assistance programs in addition to many others outlined in the CARES and HEROES Acts. The forgiveness of federal student loan debt would act as a continuation of government spending in order to facilitate economic recovery.

According to the Pew Research Center, 1 in every 3 adults under the age of 30 years old carry student loan debt. With a portion of this debt addressed, the housing market would experience immediate positive growth as 83% of non-homeowners reported student loan debt as a factor in delaying their purchase of a home found in a 2017 study by the National Association of Realtors.

Opponents of the Biden Administration’s plan for student loan cancellation cite the growing Federal deficit and unfairness for those individuals who have successfully paid their loans back. In the words of Steve Forbes, Forbes Media Chairman, during a Fox News segment last November, student loan cancellation “would make a mockery of those who played by the rules.” However, it is widely recognized that younger generations have paid far more for their education while wages have flatlined. According to Pew Research, “Compared with earlier generations, more Millennials have outstanding student debt, and the amount of it they owe tends to be greater.”

As one of the many young adults working to repay student loan debt, I welcome the Biden Administration’s plan to cancel a portion of student loans, but concurrently recognize that the financial burden of post-secondary education is not sustainable. If our goal is to build a robust, more inclusive economy, we must not continue to paralyze entire generations of graduates with life-impeding debt.

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