Joe Biden, in an effort to woo progressive and young voters, campaigned on the promise of forgiving student loan debt. So far, over eighteen months since being inaugurated, Biden has failed to cancel student loan debt.
Student loans have been paused, however, for nearly two years. But payments are set to resume in September, and the debate over what to do about student loan debt is heating up. The options, roughly outlined, include forgiving all student debt, forgiving a portion of student debt, demanding full repayment on all student debt, or extending the payment pause further. Biden needs to make a decision in the next two weeks. What Biden will do is open to rampant speculation. What Biden should do is cancel all student debt.
Joe Biden Has a Challenge With the Student Debt Issue
“We should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator Warren and colleagues.” That’s Biden himself, in writing, via Tweet, on March 22, 2020 – in the heat of a presidential campaign. “Young people and other student debt holders bore the brunt of the last crisis. It shouldn’t happen again.”
In April 2020, Biden reemphasized his promise to cancel student debt, in a piece on Medium, which outlined his COVID recovery policies. Amongst the pandemic-related policies: “immediately cancel a minimum of $10,000 of student debt per person.” At a town hall, just one month before the 2020 election, Biden once again stated, in unequivocal language, that he would cancel student loans; Biden said he was going to “make sure everybody … gets $10,000 knocked off of their student debt.”
Obviously, Biden didn’t quite mean what he said; he has neglected his campaign promise – despite having the power to cancel student loans. “Biden Has Power To Cancel Student Loans For Every Federal Borrower, Attorney General Says,” Forbes wrote. Biden’s failure to cancel student loans stems not from his inability to do so, but from his unwillingness to do so.
Yet, the truth is, $10,000 worth of cancellation isn’t nearly sufficient. “Americans owe nearly $1.75 trillion in student loan debt, spread out among about 48 million borrowers,” StudentLoanHero.com reported. “That’s about $412 billion more than the total U.S. auto loan debt.”
“Among the class of 2020, 55 percent of bachelor’s degree recipients took out student loans, graduating with an average of $28,400 in federal and private debt. And 14 percent of parents with children in the class of 2019 – the latest data available – took out an average of $37,200 in federal parent PLUS loans.”
Even if Joe Biden Gets $10,000 Forgiveness Per Student, Many Will Say it’s Not Enough
Accordingly, $10,000 of loan forgiveness would just be a drop in the bucket – too insignificant to substantially improve the financial well-being of most borrowers.
What’s odd about the student loan forgiveness debate, however, is that generally there is an assumption that the choices are between forgiving debt and collecting debt. Yet, repayment is not a foregone conclusion. Consider the current repayment statistics for direct loan repayments. Of the 37 million dollar direct loan borrowers, only half of a million are in repayment. Half of a million – out of 37 million.
Meanwhile, 3 million borrowers are in deferment; 25 million are in forbearance; and a stunning 5 million are in default. So, ten times as many direct loan borrowers are in default rather than in repayment. The premise that the federal government is ever collecting on their student loan debt is kind of silly based on the numbers available. Accordingly, the primary drawback of canceling student loans – that being the federal government loses the money – is negated.
Similarly, arguments that student loan debt is not progressive, because it benefits all borrowers equally – or that it prioritizes the benefits of privileged people, who have already gone to college – are absurd. The people with student loan debt are the ones that couldn’t afford to go to college. That’s what student loans are: loans that allow people who can’t afford college to attend college.
The rich kids, the privileged kids, their parents already paid for college; they don’t have student loan debt. It’s pretty straightforward. So, they don’t benefit from student loan cancellation. Withholding student loan forgiveness punishes only the kids who couldn’t afford college. And punishing the kids who couldn’t afford to go to college, yet invested in their education anyway, recklessly, in pursuit of the American Dream – well, that simply runs counter to the American dream.
Biden should cancel all student loan debt.
Harrison Kass is the Senior Defense Editor at 19FortyFive. An attorney, pilot, guitarist, and minor pro hockey player, he joined the US Air Force as a Pilot Trainee but was medically discharged. Harrison holds a BA from Lake Forest College, a JD from the University of Oregon, and an MA from New York University. He lives in Oregon and listens to Dokken. Follow him on Twitter @harrison_kass.