Something unprecedented just occurred. Student loan forgiveness will soon happen for swaths of American citizens.
On Biden’s campaign trail, he focused on the burdensome loans students in America use to pay for their college education. One of his main talking points was about student loan forgiveness, which garnered many young people’s appraisal. After Biden was sworn into office, his eagerness to cancel student loans had seemingly vanished. After almost two years in office, Biden has decided to alleviate a portion of millions of Americans’ student loans.
Those earning less than $125,000 are eligible for Biden’s student loan forgiveness plan. The exemption of $10,000 will apply to anyone suffering from overbearing student loans. Those who have Pell Grants will receive $20,000 instead. This push to alleviate student loans comes after the unfathomable accumulation of debt hid a record-high of $1.6 trillion. After the pandemic hit and many lost their jobs, the debt burden increased tremendously with no solution but for the government to roll out a forgiveness initiative.
President Joe Biden spoke on Wednesday about the student loan forgiveness plan and how he hopes to alleviate the financial load on many struggling Americans. The goal is to give working-class folks more “breathing room” during an unprecedented economic period. Biden also acknowledged in his speech that a college degree doesn’t solidify a high-paying job anymore. Millennials and Gen-Zers are at a higher disadvantage regarding wealth accumulation than previous generations, which galvanized the government to restrategize their debt forgiveness initiatives. The temporary student loan pause, instituted at the start of the pandemic, will also continue through the end of 2022.
This massive wave of student loan forgiveness comes after years of inner debate between the House of Representatives and the Senate. But it was left-leaning democrats like Senator Elizabeth Warren of Massachusetts who pressured Biden to follow through with his debt forgiveness principles. Unfortunately, Warren and Senate Majority Leader Chuck Schumer wanted a heftier forgiveness plan of $50,000 per debt-ridden American. But, there was internal pushback from moderate democrats and republicans because of the supposed amount of taxes student loan absolution would cause. A $10,000 debt forgiveness plan will allegedly cost the federal government $300 billion.
Though some people criticized Biden’s actions on Wednesday, he stood up for his decision to aid working-class families and citizens nationwide. Student loan forgiveness could also help stimulate the economy, with more people able to spend their money on the skyrocketing cost of general goods. Others believe that absolving people of their loans will increase the inflation rate. Regardless of what will happen economically, getting rid of insidious loans will help more than 43 million Americans who have suffered under the weight of their substantial burdens.
Student loan forgiveness won’t only help those working-class families but those of marginalized racial identities who America’s education system has often neglected. Black students are more likely to take loans out for their education at larger amounts compared to white students. On average, Black students accumulate $25,000 more in student loan debt after completing college than white students. Forgiving debt isn’t just an initiative for better financial prosperity for Americans but is an integral move to fight the racial economic disparity that’s endemic to this country.