Is Student Debt Cancellation Really Helping Those Who Need It Most?
WASHINGTON – Debate over canceling student loans intensifies following comments by President Joe Biden at a CNN town hall on Tuesday.
Biden rejected a questioner’s request to cancel $ 50,000 in student loans.
“I won’t make it,” Biden said.
Senator Chuck Schumer (D-NY), along with progressive lawmakers, called on Biden to issue an executive order canceling $ 50,000 in debt.
“All you need is a stroke of the pen,” Schumer told a crowd in New York in December, defending his political position.
WHAT IS THE PRESIDENT SUPPORTING?
Biden did not completely reject the idea of canceling some form of debt.
White House Press Secretary Jen Psaki recently tweeted that the administration was considering possible executive action.
Biden has previously said he will support congressional action to cancel debt and has supported the cancellation of up to $ 10,000 in student loan debt.
The president continues to support the cancellation of student debt to give relief to students and families. Our team is examining if there are any steps he can take through executive action and he would be happy to be able to sign a bill sent to him by Congress.
– Jen Psaki (@PressSec) February 4, 2021
WHO HELPS DEBT CANCELLATION?
Renee Nicole Allen is an American with a student debt profile that may leave you in shock.
Between her bachelor’s degree, her law degree and her additional studies, she accumulated approximately $ 385,000 in student debt.
“I don’t know how far-sighted an 18-year-old is,” Allen said.
She says she has since paid off some of that debt and currently owes about $ 265,000.
“It doesn’t look any better to me actually,” Allen said with a laugh. “I reached the maximum out of patience and reprieve very early.”
While debt cancellation would no doubt help Allen and others, there is an academic debate about who is actually helped by debt cancellation.
“We shouldn’t forgive all the student debt that exists,” said Sandy Baum, senior fellow at the Urban Institute.
Baum’s research shows that large sums of student debt are typically owed by higher-income Americans, many of whom are able to eventually pay off the debt.
“People who borrow a lot of money are usually people who went to college for a long time and have graduate degrees, and those people have big incomes,” Baum said.
Baum says the poorest Americans right now are low-income earners, many of whom don’t have student debt because they didn’t go to college.
Baum says targeted aid makes much more economic sense.
“How would you feel if you just finished paying off your loans and they told you, ‘(for) those who haven’t paid their loans, we forgive them’, but you don’t get anything?” Baum said.