Americans collectively owe more than $1.7 trillion in student loan debt, more than three times what it was just 15 years ago.
Many progressive Congressional lawmakers have called for President Biden to forgive all federally owned student loans.
Others lawmakers have argued for up to $50,000 in forgiveness per borrower.
Recent reports suggest the White House is more likely to forgive $10,000 and include an income cap that limits relief to high level borrowers. This more limited approach of forgiving $10,000 would provide relief to people who need it most while ensuring that high-earning borrowers like doctors and lawyers don’t get a bailout.
The White House has also repeatedly extended a pause on loan payments that was put in place by the Trump administration in the early days of the pandemic. That pause has included a freeze on interest, which on its own has saved the average borrower about $5,500, according to one estimate.
Why there’s debate
Supporters of student loan debt forgiveness say the enormous financial burden of loans, many with onerous interest rates, make it impossible for college graduates to get ahead.
Debt relief would directly affect around 43 million Americans. It is believed that forgiving student loan debt would free those people to spend their money on goods and services and would create significant economic benefits for everyone.
Many also argue that debt relief would help reduce racial inequality, since people of color tend to borrow significantly more than their white peers.
Opponents of student debt forgiveness say it would be unfair to the vast majority of Americans who don’t have student debt — particularly those who paid off student loans on their own. Additionally, federal student Liam debt forgiveness doesn’t erase the debt, it only shifts the burden from the borrowers to the American taxpayers, who are already burdened with the tad of inflation.
Some make the case that there are much more effective ways to reduce inequality. Others argue that it would be wasteful to forgive student debt without also taking on the much more difficult task of fixing problems in the higher education system that created the student debt crisis in the first place.
What’s next
If Biden does choose to forgive some student debt, it’s not clear whether the courts will uphold the executive branch’s authority to do so.
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