Price on Politics: President Biden’s student loan forgiveness

Megan+Fisher

Megan Fisher

Price Wilborn, Commentary writer

On Aug. 24, President Joe Biden announced that his administration would be canceling student loan debt up to $10,000 for borrowers who earn less than $125,000 a year. Married couples can see the same amount of relief if they make less than $250,000 a year. Pell Grant recipients will be eligible to see up to $20,000 of their debt canceled.

This announcement fulfills a campaign promise then candidate Biden made while on the campaign trail. In a tweet on March 22, 2020, Biden wrote that “we should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator [Elizabeth] Warren and colleagues. Young people and other student debt holders bore the brunt of the last crisis. It shouldn’t happen again.”

Since taking office in Jan. 2021, Biden has seemed noncommittal concerning student loan relief. Biden continued to extend the pause on federal student loan payment (which has been extended through the end of this year), but until now, the president and members of his administration, like Secretary of Education Miguel Cardona, issued statements saying the White House “is going to continue conversations around loan forgiveness.”

It was for these reasons that in February of this year, I wrote that “I wouldn’t get your hopes up” about loan forgiveness. I was pleasantly surprised to be wrong in that prediction.

In his speech announcing the cancelation, President Biden stated that “ninety-five percent of the borrowers can benefit from these actions. That’s nearly 43 million people.” Of these Americans, over 60% are Pell Grant Recipients and almost 45% will have their debt fully canceled.

This is a needed step forward to allow younger Americans the opportunities they have worked for. According to the Federal Reserve, Americans hold almost 1.75 trillion dollars in student loans. The Education Data Initiative states that “the average borrower takes 20 years to repay their student loan debt” and that “the average student loan accrues $26,000 in interest alone” in these 20 years.

This is no way for young Americans fresh out of college to begin the rest of their lives. Finishing college should be a time of limitless opportunity and optimism. They have spent the majority of their lives in various educational institutions preparing for life when they “get out.” 

Instead of being able to save money for homes, vehicles and other expenses, they must begin their independent adult life by sending money to the federal government and their institution of higher education. They should be able to begin their next chapter without worrying about how and when they will be paying their loans off. 

There are many that disagree with President Biden’s decision to cancel these loans for Americans. A CBS News article published on Aug. 25 outlined four criticisms of the president’s plan: forgiving this amount of debt will make inflation even worse, not better; it is unfair to Americans who have already paid off their debt or who never attended college; the issue of rising college costs is not addressed; and the administration’s ability to cancel this debt will likely be challenged in court.

Economists have stated that the proposed plan will eliminate previous Biden administration efforts to curb inflation, even though administration officials have stated that the resumption of student loan payments will fill this hole. A former Obama administration official tweeted that “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.” 

Some are expecting legal oppositions to the plan because Biden and Education Secretary Cardona are justifying the action through the HEROES Act. In the Department of Education’s released memo on the legal authority of this debt cancellation, the administration uses the HEROES Act as legal justification. 

The HEROES Act was passed following the Sept. 11 2001 attacks. According to the Department of Education’s memo, the act “provides the secretary broad authority to grant relief from student loan requirements during specific periods (a war, other military operation, or national emergency, such as the present COVID-19 pandemic) and for specific purposes (including to address the financial harms of such a war, other military operation, or emergency).” Some believe this will not hold up in court, saying that the justification is weak and that the president does not have this power.

College costs are rising each year. At WKU, costs rose 1.19% for the fall 2022 semester. US News reports that the average in-state tuition in the United States has risen from $3,738 in 2002 to $11,631 in 2022, a 211% increase over the last 20 years. This action by the Biden administration does nothing to lower – or at least stabilize – growing college tuition prices. The root problem will still be present after debt is forgiven, and trends show that it will only get worse.

The largest critique of the administration’s plan to cancel billions of dollars in student loan debt is that it is unfair to Americans who have either already paid off their college tuition or decided not to attend college. 

According to CBS, Senate Minority Leader Mitch McConnell (R-KY) said “I think it is a bad idea. An awful lot of Americans chose not to go to college.”

Senator Ted Cruz (R-TX) echoed this idea, saying “what President Biden has in effect decided to do is to take from working class people. To take from truck drivers and construction workers right now, thousands of dollars in taxes in order to redistribute it to college graduates who have student loans.”

Senator Richard Burr (R-NC) said in a statement that “Every American who paid back their student loans, who put themselves through school by saving and working extra jobs, or who chose not to go to college at all should be outraged right now.”

Each of the above criticisms are valid. The fact is, however, that young people need to be given the opportunities to thrive. It has been said of my generation that we are “entitled” or that we expect everything to be handed to us. I strongly disagree with these statements.

The average rent in the United States is $1,326 a month. The median annual wages for Americans aged 25-34 range from $42,000 a year as an arts, liberal arts and humanities major to $60,000 as a STEM major. The average monthly student loan payment is $393, with the average debt being $39,351. Without including average prices for food, vehicles, gas and more, these payments begin to add up.

Instead of having assistance in beginning our adult life, my generation is told we are entitled. We are not entitled. We want to live in a nation and a world that recognizes our contributions. We want to live in a world that recognizes that we have hopes, dreams and talents that are important. We want to feel valued, not looked down upon by our elders.

In an ever-changing, ever-evolving, ever-advancing world, the youngest generations are in positions to take charge and be leaders. On issues like student loan forgiveness, climate change, racial justice, LGBTQ+ rights and women’s rights, our voices are among the loudest. We want change. We want to be a part of that change. 

I’m not saying we want it to be easy. We just need to be given an opportunity to have an equal footing, a fair chance and an equal say to achieve our dreams of change and a better world. President Biden’s student loan forgiveness plan is a good start.

We may be young, but that does not make us any less important. The world is always on the cusp of the next discovery, social justice fight or life-altering event, and young people will be front and center. We’re here and we care, we just ask for a fair start.

Commentary writer Price Wilborn can be reached at [email protected]. Follow him on Twitter @pricewilborn.