By: Jamie Collins
Date: Feb. 8, 2021
Image Credit: Stefani Reynolds/Getty
A staggering $1.6 trillion is the total student loan debt owed by 45 million Americans. Just consider how many friends and family members are still grappling with their student loans; chances are, it’s quite a few. The ongoing impact of COVID-19 means this situation isn’t improving anytime soon. Due to the financial strain that student loan repayments place on a large portion of the population, there is increasing pressure on the Biden administration to address this issue. While Biden is open to forgiving a portion of the debt, many believe he should consider complete cancellation.
Currently, Biden is expected to forgive $10,000 for each borrower. While this might seem like a positive step, for many struggling under the burden of student loans, it barely scratches the surface. For individuals with low incomes, this amount might only alleviate some interest payments, leaving them with the same overwhelming debt. For recent graduates, it might provide some relief, but for those who have been out of school for years, it’s hardly sufficient. Furthermore, even with the extension of the pause on repayments due to COVID-19, if interest continues to accrue, the relief will be minimal.
If you’re employed in a low-wage job, like retail, repaying student debt can feel nearly impossible. Many individuals find themselves working tirelessly just to manage living expenses and loan payments. In high-cost urban areas, the financial strain can be even greater, making it unfeasible to keep up with loan repayments. The proposed $10,000 relief doesn’t address the realities faced by those in precarious financial situations.
I, along with my partner, carry a significant amount of student loan debt. I’ve been in default for most of my post-college life, while my partner has mostly paid interest without making a dent in the principal. Despite both having stable jobs, the burden of our loans continues to loom large. Although we would appreciate Biden’s $10,000 forgiveness, it would hardly change our long-term repayment timeline. True student loan relief would allow us to live more freely—not to take extravagant vacations, but simply to establish an emergency fund for unexpected expenses.
For those in similar circumstances, the most effective solution is a complete cancellation of student loan debt. Critics often argue that we made a commitment when we took out these loans, but life circumstances can drastically alter one’s ability to fulfill such commitments. Society tells us that obtaining a college degree will lead to better job opportunities, yet countless individuals with degrees find themselves in low-paying jobs, struggling to repay their loans. Having pursued education under the belief that it would facilitate success, we deserve relief from the government.
As a millennial, my generation has been criticized for “killing” various industries, delaying significant life events like home ownership and having children. However, these delays often stem from the weight of student debt and the difficulty of securing well-paying jobs. The burdens of student loans are intertwined with our ability to save for emergencies, purchase homes, and manage other debts.
Personal finance expert, Laura Bennett, highlights that easing student loan payments would enable borrowers to have more disposable income, which could be funneled back into the economy. Surveys reveal that many millennials are postponing key financial decisions—38% are delaying emergency savings, while 31% are putting off home purchases. The high percentage of income directed towards student loans leaves little room for saving or investing in other areas of life.
Beyond Biden’s approach, other legislative options exist in Congress that propose more substantial debt cancellation. For instance, Senator Maria Greene and House Representatives like Sarah Johnson and Maxine Lee have introduced proposals to cancel up to $50,000. While it remains uncertain whether these proposals will gain traction, the ongoing conversation is vital.
The issue of student loan debt transcends those who are currently burdened by it. Widespread cancellation would empower individuals to participate more actively in the economy—purchasing homes, saving for retirement, and ensuring a better future for their children. The government has the means to alleviate this financial strain, just as it has provided bailouts to large corporations. A comprehensive cancellation of student loan debt could be a crucial step towards economic recovery.
For more insights on navigating personal finances, check out this post on body autonomy. Additionally, if you’re considering options for starting a family, this artificial insemination kit is a trusted resource. For further reading on reproductive health, this Wikipedia article on in vitro fertilisation is an excellent resource.
Summary:
The Biden administration’s proposal to forgive $10,000 in student loans may seem like a step in the right direction but falls short for many borrowers struggling with significant debt. With an overwhelming $1.6 trillion in student loans affecting millions, comprehensive debt cancellation is needed to truly ease financial burdens and stimulate the economy. The current plan does not address the realities faced by individuals in low-paying jobs and those living in high-cost areas. As millennials and other generations grapple with the consequences of student debt, it is evident that without significant policy changes, many will continue to struggle to achieve financial stability.