Is debt forgiveness the right approach?
President Biden announced on Aug. 24 that the federal government would cancel up to $20,000 of student loan debt for tens of millions of Americans. Is debt forgiveness the right approach? Across the United States, 45 million people owe $1.6 trillion for federal loans taken out for college — more than they owe on car loans, credit cards or any consumer debt other than mortgages. What’s your reaction to President Biden’s plan to cancel $10,000 in debt for those earning less than $125,000 and $20,000 for those who had received Pell Grants for low-income families? Do you believe that canceling some student debt is appropriate and fair? Does the plan not go far enough? Or is it fiscally irresponsible and unfair to those who have already paid off their loans or those who have not attended college? What’s your reaction to President Biden’s student loan forgiveness plan? Is it the right way to address the reality that 45 million Americans collectively owe $1.6 trillion in student loans? Or should it go further and cancel all student debt? Is it presidential overreach, as some critics contend? Or is it unfair to those who haven’t gone to college or who have already paid their loans in full? How will the president’s debt relief plan affect you, your friends and family?
Are you considering attending college or taking classes in college? Does the cost of college and the prospect of loans and debt affect how you think about your future? How concerned are you that the typical undergraduate student with loans now finishes school nearly $25,000 in debt?
Which of the arguments in favor of canceling student debt do you find most persuasive? For example, are you swayed by Mr. Biden’s belief that his plan will allow people to “climb out from under that mountain of debt” so that they can “finally think about buying a home or starting a family or starting a business” or the argument that debt forgiveness is necessary to address racial disparities in the economy? Which of the arguments against canceling student debt do you find most compelling? Do you agree with Senator Ben Sasse that the plan “forces blue-collar workers to subsidize white-collar graduate students? Do you think that it makes sense to make a major investment that leaves out those who did not attend college? Is the plan fair to those students who have already repaid their student debt? Why? The $1.6 trillion in student debt held in America is roughly equal to the size of the economy of Brazil or Australia. That figure skyrocketed over the last half-century as the cost of higher education increased. How would you like to see the country address college’s rising costs? Do you think that student debt cancellation is an important step in making higher education more affordable and accessible? Or does it leave the problem in place? Why or why not? What other reforms do you think would make a difference? President Biden announced a plan on Wednesday to wipe out significant amounts of student loan debt for tens of millions of Americans, saying he would cancel $10,000 in debt for those earning less than $125,000 per year and $20,000 for those who had received Pell grants for low-income families.
The debt forgiveness, although less than what some Democrats had been pushing for, comes after months of deliberations in the White House over fairness and fears that it could exacerbate inflation before the midterm elections.
“All of this means people can start finally to climb out from under that mountain of debt,” Mr. Biden said in remarks from the White House. “To finally think about buying a home or starting a family or starting a business. And by the way, when this happens, the whole economy is better off.”
Mr. Biden also announced that a pandemic-era pause on student loan payments, which has been in effect since March 2020, would expire at the end of the year. The timing for the debt relief is uncertain; the Department of Education said it would set up an application process by the end of the year.
However, critics — including some members of Mr. Biden’s party — said the move was deeply unfair.
Jason Furman, a Harvard economist and former top economist for President Barack Obama, said the plan “would unnecessarily provide tens of thousands of dollars to many high-income households in a way that goes well beyond even what he promised in the heat of a Democratic primary when the problem facing the country was low inflation — not high inflation.”
The Republican National Committee released a statement slamming the program as “Biden’s bailout for the wealthy.”
Senator Ben Sasse, Republican of Nebraska, said the plan “forces blue-collar workers to subsidize white-collar graduate students. Instead of demanding accountability from an underperforming higher-education sector that pushes so many young Americans into massive debt, the administration’s unilateral plan baptizes a broken system.”
Because Mr. Biden used executive action, rather than legislation, to forgive the loans, legal challenges are expected. It is unclear, however, who would have the standing to press their case in court. A recent Virginia Law Review article argued that the answer might be no one: States, for example, have little say in the operation of a federal loan system.
Are you considering attending college or taking classes in college? Does the cost of college and the prospect of loans and debt affect how you think about your future? How concerned are you that the typical undergraduate student with loans now finishes school nearly $25,000 in debt?
Which of the arguments in favor of canceling student debt do you find most persuasive? For example, are you swayed by Mr. Biden’s belief that his plan will allow people to “climb out from under that mountain of debt” so that they can “finally think about buying a home or starting a family or starting a business” or the argument that debt forgiveness is necessary to address racial disparities in the economy? Which of the arguments against canceling student debt do you find most compelling? Do you agree with Senator Ben Sasse that the plan “forces blue-collar workers to subsidize white-collar graduate students? Do you think that it makes sense to make a major investment that leaves out those who did not attend college? Is the plan fair to those students who have already repaid their student debt? Why? The $1.6 trillion in student debt held in America is roughly equal to the size of the economy of Brazil or Australia. That figure skyrocketed over the last half-century as the cost of higher education increased. How would you like to see the country address college’s rising costs? Do you think that student debt cancellation is an important step in making higher education more affordable and accessible? Or does it leave the problem in place? Why or why not? What other reforms do you think would make a difference? President Biden announced a plan on Wednesday to wipe out significant amounts of student loan debt for tens of millions of Americans, saying he would cancel $10,000 in debt for those earning less than $125,000 per year and $20,000 for those who had received Pell grants for low-income families.
The debt forgiveness, although less than what some Democrats had been pushing for, comes after months of deliberations in the White House over fairness and fears that it could exacerbate inflation before the midterm elections.
“All of this means people can start finally to climb out from under that mountain of debt,” Mr. Biden said in remarks from the White House. “To finally think about buying a home or starting a family or starting a business. And by the way, when this happens, the whole economy is better off.”
Mr. Biden also announced that a pandemic-era pause on student loan payments, which has been in effect since March 2020, would expire at the end of the year. The timing for the debt relief is uncertain; the Department of Education said it would set up an application process by the end of the year.
However, critics — including some members of Mr. Biden’s party — said the move was deeply unfair.
Jason Furman, a Harvard economist and former top economist for President Barack Obama, said the plan “would unnecessarily provide tens of thousands of dollars to many high-income households in a way that goes well beyond even what he promised in the heat of a Democratic primary when the problem facing the country was low inflation — not high inflation.”
The Republican National Committee released a statement slamming the program as “Biden’s bailout for the wealthy.”
Senator Ben Sasse, Republican of Nebraska, said the plan “forces blue-collar workers to subsidize white-collar graduate students. Instead of demanding accountability from an underperforming higher-education sector that pushes so many young Americans into massive debt, the administration’s unilateral plan baptizes a broken system.”
Because Mr. Biden used executive action, rather than legislation, to forgive the loans, legal challenges are expected. It is unclear, however, who would have the standing to press their case in court. A recent Virginia Law Review article argued that the answer might be no one: States, for example, have little say in the operation of a federal loan system.
