How much student loan debt should you forgive?

Saturday, May 21, 2022
author picture Mia Chevalier
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President Biden's Student Loan Forgiveness Initiative

A major policy initiative in the coming months is President Biden's plan to waive the balance of student loans. The idea of outright forgiveness is politically popular with Democrats‚ but is extremely unwise. Many people say this program is just another way for the federal government to bail out students‚ and it's a waste of money and taxpayer dollars. The truth is‚ outright forgiveness of student debt is neither fair nor desirable‚ and it's certainly not a good policy.

You can see the 360 from many perspectives about today's most important stories and debats.

Yahoo Finance presents: (D)‚ Massachusetts Rep. Ayanna Pressureley

(D)‚ Ayanna Pressley‚ a Massachusetts Representative‚ joins Yahoo Finance's Aarthi Vignash to discuss President Biden’s willingness to cancel student loan debt. Also‚ the impact of midterms on the cancellation timeline and student loan administration ethics.

What’s happening

On Thursday‚ President Biden stated that he is taking an in-depth look at all options and would make his decision within the next few weeks. Biden suggested that Congress pass a bill to remove as high as $10‚000 per borrower before he took office. A number of prominent Democrats claim that the president is legally authorized to cancel the debt. Biden's comments recently are the most clear indication yet that he has been considering this plan. Americans. collectively we owe over $17 trillion in student debt is more than triple what it was 15 years ago. Some progressive legislators have asked for Biden's forgiveness of all federal student loans. Other senators‚ including Senator. Others -- including Sen. Forgiveness can be argued up to $50‚000 Per borrower. However‚ recent reports suggest otherwise. The White House seems more probable To keep to $10‚000 while potentially including an income cap to limit relief for borrowers earning less than $125‚000. The Biden administration's performance in the last two years has been remarkable. Loan forgiveness offered in a targeted manner More than 700‚000. This has resulted in the elimination of over $17 billion student loan debt. In the days before the outbreak‚ the Trump Administration had placed a temporary halt on loans payments. The White House repeatedly extended that pause. This pause included interest freezes‚ which have not been extended. The average borrower saved $5‚500‚ according to one estimate.

Why there’s debate

Students who support student loan forgiveness argue that the huge financial burden of loans (many with high interest rates) makes it difficult for students to succeed. Although debt relief could only be applied to approximately 5% of the population‚ it would directly affect around 6%. 43 million Americans Advocates argue that allowing people with low incomes to use their money for goods and services rather than reinvesting it in debt would have significant economic benefits. Debt relief could also help to reduce racial inequalities‚ as people of color are more likely to be able pay less. Borrowing significantly more is a common tendency than their white peers. However‚ there is a lot of disagreement about how much student debt forgiveness should be. Biden's $10‚000 plan would be a less restrictive approach. It would help those who most need it‚ while also protecting high-earning borrowers such as lawyers and doctors from being bailouted. Others argue that the nation needs to forgive much more student debt to solve the huge problems it causes. Students who are against student debt forgiveness argue that it is unfair for the majority of Americans without student debt‚ especially those who have paid off their student loans. Others on the right argue that there are better ways to decrease inequality. Some argue it is wasteful not to repay student debt but also fix the problems within the higher education system which created the student loan crisis.

What’s next

It is not yet clear if the courts will allow Biden to forgo student loans if he does. Uncertain is the impact student debt relief may have on Democrats' popularity among younger voters. You have left the party Over the last two years‚ they have increased in number.

Perspectives

A whole generation could be eligible for loan forgiveness to help them achieve their American dreams Instead of injecting a temporary stimulus to the economy as critics claim‚ cancelling would encourage Americans to reconsider their long-term spending plans‚ and make investments in a brighter future. This could allow millions of people to buy homes‚ start businesses or give their children an education. These are investments that will benefit both their families and the economy. -- Katrina vanden Heuvel‚ washington post This would be unfair for those who already have paid their loans off. It's hard to imagine the humiliation that top-down cancellation of debt would cause to college graduates who voluntarily fulfilled their obligations. Mark Davis newsweek It is not right to let selfishness and indifference of some individuals stop policies that could help millions. It is absurd to suggest that current borrowers need to endure a student loan crisis of record proportions. Just because their predecessors have made grudging payments to pay for college‚ it does not justify watching people fall under the burden of debt. -- Christina Wyman‚ nbc news When they borrowed money‚ borrowers knew exactly what they were getting into You must repay the loan over time with interest if you borrow money to finance college tuition. A contract was signed. The terms were known from the beginning‚ or you had to be aware of them. Don't get a loan if you aren't ready to take on the debt burden. -- Jim Geraghty‚ national review Student loan relief without serious restrictions would be mostly a welfare handout for the wealthy. The economics of universal loan forgiveness raise serious fairness issues‚ both for existing borrowers as well as future borrowers. Blanket loan forgiveness doesn't distinguish between those who are able to repay the loans quickly and those who are not. Blanket relief can lead to too little relief for those who need it‚ and too much for those who have. John R. Brooks‚ Adam J. Levitin‚ politico The elite would not receive debt forgiveness as a gift. Student loan debt does not belong to the wealthy.

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Persis Yu says that the vast majority of student loan borrowers come from low and middle class Americans. They borrowed to pay for postsecondary education. CNN Students may not have a problem with student debt Some might say that student loan cancellations are temporary because student debt can be very bad. It's that simple. The question is whether or not it's bad. is It is actually quite complicated. Student-loan is‚ on its surface‚ the government financing millions of students' college costs. This includes people without the money to make the payments and those who were reluctant to take out loans from private lenders. -- Jerusalem Demsas‚ atlantic It is possible to do more for people who are in dire need Instead of trying to increase support for student loan cancellations‚ Democrats should focus resources on antipoverty programs or strengthening the safety net for borrowers. These policy reforms‚ and other initiatives would be more beneficial to those in real need of the help. -- Beth Akers‚ the hill It may be Biden’s only real option for providing meaningful relief to Americans in need Student debt relief does not need to be passed through Congress‚ as is the case with many other issues. You can address it with a flick of Biden’s pen. -- Aida Chavez‚ the nation Democrats are trying to sell votes by using student debt relief as a cheap way to get their vote Expect a huge election-year gift for student borrowers‚ at taxpayer expense. -- Editorial‚ wall street journal Students would see a substantial drop in their student debt. Biden must take action to eliminate Black student loan debt. This will prevent his administration from pursuing its agenda for eliminating racial disparities. Debt elimination could lead to greater economic participation for Blacks in terms of homeownership and spending power. -- Michael Arceneaux‚ the week The system that caused the crisis is not being addressed by student debt. Choices have consequences. These are the mistakes Americans made and need to learn again. We will teach the exact opposite if we don't reform student lending. Instead‚ we should cancel owed debts. Dana Hall McCain alcom The first step towards a complete overhaul of higher education should be debt forgiveness. In most Western democracies‚ student debt is rare or nonexistent. Many countries offer a stipend to help with monthly expenses‚ similar to the GI Bill. It's been talked about how President Biden could reduce America's student loan burden. It's time to move [along] with that. Thom Hartmann common dreams Do you have a favorite topic that The 360 should cover? Send your suggestions to [email protected] Illustration by Yahoo News. Photos: Getty Images. Mark Wilson/Getty Images.