Nobody wants to be in debt. It can be a stressful and overwhelming feeling considering everything that needs financial attention in today’s world. Mr. Joe Biden wants to deal with the student debt situation in a way that benefits many students, but now there is a lot of doubt about that possibility.
Former Presidential nominee Bernie Sanders received a lot of attention for his thoughts on the student debt crisis. Part of his plan for dealing with the crisis was to provide debt-free college. The other part of his plan was to cancel student loan debt (Berniesanders.com).
It looks like Mr. Biden’s thoughts for this issue are not as extensive as his former rival’s are. Mr. Biden recently said that he would be unlikely to cancel student loan debt worth $50,000. While he made this claim, he is still trying to find a solution to the problem. “Earlier in the day, Biden had reaffirmed his general support for broad student loan forgiveness, but suggested that he would support a smaller amount of $10,000” (Minsky). While what he said seems to be his stance, others in his party are hoping they can convince him otherwise (Minsky).
In a chart from Yahoo! Finance, canceling $10,000 of student loan debt would rid 36% of borrowers of debt completely. This would cost the government $371 billion and leave $1,129 billion dollars of student debt. By canceling $50,000, 80% of borrowers would become debt-free. This would cost the government $1,049 billion and leave $451 billion worth of debt.
Other than individuals not having to pay back loans, what else makes this such a big topic? Well, the economy as a whole comes into play. According to Scholarship America, 36% of recent college graduates are unlikely to buy a house. Debt also impacts credit score. Lastly, people might be dissuaded from going to college at all because of loan debt, leading to a “shortage of educated employees facing the U.S. workforce” (Scholarship America).
Adam S. Minsky, Esq. “Biden Says He Is ‘Unlikely’ To Cancel $50,000 In Student Loan Debt By Executive Order.” Forbes, Forbes Magazine, 24 Dec. 2020, http://www.forbes.com/sites/adamminsky/2020/12/23/biden-says-he-is-unlikely-to-cancel-50000-in-student-loan-debt-by-executive-order/.
“Free College, Cancel Debt.” Bernie Sanders Official Website, berniesanders.com/issues/free-college-cancel-debt/.
Scholarship America. “The Far-Reaching Impact of the Student Debt Crisis.” Scholarship America, 12 Feb. 2020, scholarshipamerica.org/blog/the-far-reaching-impact-of-the-student-debt-crisis/.Swaminathan, Aarthi.
“’I’m Going to Get in Trouble for Saying This’: President-Elect Biden Disputes Democratic Debt Cancellation Plan.” Yahoo!, Yahoo!, 24 Dec. 2020, http://www.yahoo.com/finance/news/biden-student-debt-loan-forgiveness-cancel-173246655.html.