Here are 13 reasons President Joe Biden should call off student loans.
Here’s what you need to know – and what it means for your student loans.
Whether you support or oppose sweeping student loan relief, it helps to understand the following arguments that support sweeping student loan relief. As Biden weighs three key student loan decisions, here are 13 facts Senator Elizabeth Warren (DMA) and other supporters want you to know about student loan forgiveness:
1. 40% of student borrowers never graduate. This means that they take out student loans but have no access to higher-paying jobs to pay off the student loan debt.
2. 99.7% of student loan borrowers don’t attend an Ivy League school like Harvard or Yale. Advocates say student loan foreclosures won’t primarily benefit wealthier borrowers. Student borrowers who attend an Ivy League school are not necessarily wealthy or high-income earners because they have a degree from a particular college or university.
3. The majority of student loans are held by households without household assets.
4. Student loan forgiveness is a matter of racial justice. For example: “Twelve years into college, most black borrowers owe more than they originally borrowed.”
5. Many student loan borrowers default on their payments. For example, 20% of student loan borrowers are in default. Of this group, 30% have defaulted on student loans for more than five years. Progressive members of Congress fear resuming student loan payments would put more student loan borrowers into default. Student loan forgiveness could help ease financial pressures.
6. The age group in which student loan debt is growing the fastest are those aged 60 to 69. While this growth is on a percentage basis (not an absolute dollar basis), more parents and grandparents are taking out student loans for their loved ones to attend college. Given that this age group is in or near retirement, their ability to generate income to pay off student loans is limited.
7. 20% of student borrowers attended a for-profit collegeand these student borrowers are twice as likely to default on their student loans.
8. Nearly 50% of all associate degree students, on average, borrow on student loans and owe nearly $20,000 on average in student loans. Student borrowers with an associate’s degree tend to earn less income than student borrowers with a bachelor’s degree.
9. Student loan cancellation could free up nearly $400 a month on student loans. Congress has also proposed 0% interest on student loans. Biden has proposed lowering student loan rates.
10 Cancellation of Student Loans could stimulate the economy. For example, student loan cancellations could add $174 billion to GDP and create up to 1.5 million jobs.
11. Widespread student loan forgiveness also helps borrowers get married, start a family, buy a home, save for retirement, and start a business.
12. Student loan forgiveness can reduce inequalities. For example, canceling $50,000 in student loans “would increase the wealth of black American borrowers by 40% and close the black-and-white wealth gap among borrowers by 25 percentage points.”
13. A majority of Americans support foreclosure on student loans. For example, a poll by the Student Borrower Protection Center shows that 62% of all likely voters support student loan cancellations, including a majority of young Republicans.
This is not a comprehensive list of the reasons advocates are fighting for sweeping student loan forgiveness. Advocates also say that student loan borrowers need a fresh start for their student loans so they can pursue the American dream. Without canceling the Bafög and extending the Bafög payment break, some borrowers feel uncertain about their financial future. Importantly, there is no guarantee that Biden will issue a large-scale foreclosure of student loans. However, with the great uncertainty surrounding student loan forgiveness, it is important to know all of your student loan repayment options. Start with these strategies to save money: