Student loan debt: How much should Biden forgive?

·Senior Editor
·7 min read

“The 360” shows you diverse perspectives on the day’s top stories and debates.

What’s happening

President Biden said Thursday that he’s “taking a hard look” at the possibility of canceling a significant share of federal student loan debt and will make his final decision “in the coming weeks.”

Before taking office, Biden encouraged Congress to help relieve some of the country’s enormous student loan burden by passing a bill to eliminate as much as $10,000 in debt per borrower. But a number of high-profile Democrats argue that the president has the legal authority to cancel that debt without Congress. Biden’s recent comments are the clearest sign yet that he is considering that plan.

Americans collectively owe more than $1.7 trillion in student debt, more than three times what it was just 15 years ago. Some progressive lawmakers have called for Biden to forgive all federally owned student loans. Others — including Sen. Majority Leader Chuck Schumer — have argued for up to $50,000 in forgiveness per borrower. Recent reports, however, suggest the White House is more likely to stick to closer to $10,000, while potentially including an income cap that limits relief to borrowers making under $125,000.

In the past two years, the Biden administration has offered targeted loan forgiveness to more than 700,000 people, eliminating over $17 billion in student debt. The White House has also repeatedly extended a pause on loan payments that was put in place by the Trump administration in the early days of the pandemic. That pause has included a freeze on interest, which on its own has saved the average borrower about $5,500, according to one estimate.

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. Even though debt relief would only directly apply to around 43 million Americans, advocates argue that freeing those people to spend their money on goods and services, rather than redirecting it toward debt, would create significant economic benefits for everyone. Many also argue that debt relief would help reduce racial inequality, since people of color tend to borrow significantly more than their white peers.

There is major disagreement, though, over how far student debt forgiveness should go. Backers of a more limited approach like Biden’s potential $10,000 plan say it would provide relief to people who need it most while ensuring that high-earning borrowers like doctors and lawyers don’t get a bailout. But others say much larger sums need to be forgiven to meaningfully fix the enormous problems that student debt creates for the country.

Opponents of student debt forgiveness say it would be unfair to the vast majority of Americans who don’t have student debt — particularly those who paid off student loans on their own. Some on the left make the case that there are much more effective ways to reduce inequality. Others argue that it would be wasteful to forgive student debt without also taking on the much more difficult task of fixing problems in the higher education system that created the student debt crisis in the first place.

What’s next

If Biden does choose to forgive some student debt, it’s not clear whether the courts will uphold the executive branch’s authority to do so. Another unknown is how student debt relief might affect Democrats’ support among young voters, who have turned away from the party en masse over the past two years.


Loan forgiveness would help an entire generation access the American dream

“Rather than inject a one-off stimulus into the economy, as some critics have charged, cancellation would likely prompt Americans to reevaluate their long-term spending plans and invest in a better future. It could give millions a chance to finally buy a house or start their business or help their kids get an education, too — investments that are good both for families and the overall economy.” — Katrina vanden Heuvel, Washington Post

It would be wildly unfair to those who have already paid off their loans

“It is hard to quantify the insult that top-down debt cancellation would deal to the legions of college graduates who met the obligations they voluntarily shouldered.” — Mark Davis, Newsweek

We shouldn’t let the selfishness of some people block policies that would help millions

“The idea that current borrowers should be made to suffer through a record-breaking student loan crisis … simply because those who came before them begrudgingly paid off their educational costs without such federal help is not a compelling reason to watch people crumble under the weight of debt.” — Christina Wyman, NBC News

Borrowers knew what they were signing up for when they took out loans

“If you take out a loan to pay for a college education, you must pay it back over time, with interest. You signed a contract. You knew the terms going in — or at least you were supposed to know them. … If you don’t want to deal with the financial pressure of debt, don’t take out the loan.” — Jim Geraghty, National Review

Without serious limitations, student loan relief would largely be a handout to the well-off

“Economically, across-the-board loan forgiveness raises serious fairness concerns, both among existing borrowers and vis-a-vis future borrowers. Blanket loan forgiveness does not distinguish between borrowers who can easily repay their loans and those who cannot. Blanket relief could end up routing too much relief to those who do not need it and too little to those who do.” — John R. Brooks and Adam. J. Levitin, Politico

Debt forgiveness would not be a handout for the elite

“Quite simply put, student loan debt is not a problem of the elite. The vast majority of student loan borrowers are low- and middle-class Americans who had to go into debt to access postsecondary education, and who are paying dearly for it” — Persis Yu, CNN

Student debt may actually not be a crisis at all

“You might argue that student-loan cancellation is having a moment because student debt is really bad. Simple as that. But the question of whether it is bad is actually pretty complicated. … On its face, student-loan debt is the state financing the ability of millions of people … to attend college, people who did not have the cash to pay up front and were loath to borrow from private lenders.” — Jerusalem Demsas, Atlantic

There are much better ways to help people in need

“Rather than trying to shore up support for student loan cancellation, Democrats should spend resources on anti-poverty programs, or strengthen the existing safety net for borrowers. Focusing on these policy reforms and initiatives, rather than student loan cancellation, would do more good for those who truly need the assistance.” — Beth Akers, The Hill

This may be Biden’s only realistic option to offer meaningful relief to struggling Americans

“Unlike a number of other policy issues, student debt relief doesn’t need to be pushed through a narrowly controlled Congress. It can be addressed with the flick of Biden’s pen.” — Aída Chávez, The Nation

Student debt relief is a cynical effort from Democrats to buy votes

“Get ready for a massive election-year gift to student borrowers at the expense of taxpayers.” — Editorial, Wall Street Journal

Student debt relief would put a significant dent in racial inequality

“Without action from Biden, Black student debt will hinder his administration’s agenda with respect to eliminating racial inequities. Arguably, debt elimination would give Black people stronger participation in the economy in terms of spending power, homeownership, and access to capital to start businesses.” — Michael Arceneaux, The Week

Addressing only student debt won’t fix the system that created the crisis in the first place

“Life is about choices, and choices have consequences. Those are the lessons Americans have gotten away from and must relearn. If we fail to reform student lending and simply cancel debts owed, we will have taught the opposite of that.” — Dana Hall McCain,

Debt forgiveness should only be the first step in a major overhaul of higher education

“Student debt is a rare or even nonexistent thing in most western democracies. Not only is college free or close to free around much of the world; many countries even offer a stipend for monthly expenses like our GI Bill did back in the day. … There’s a lot of talk about President Biden slightly reducing America's student debt burden. We need to go [way] beyond that.” — Thom Hartmann, Common Dreams

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