My husband and I are representative of the 43 million Americans who took out student loans and still carry a balance on them. In addition to helping our kids, we took out a loan for my husband to complete his doctorate.
After decades of making our minimum payments, we actually owed more than the original amount of the loan: Thanks to accruing interest, our remaining balance was larger than what we borrowed.
My husband’s application for public service loan forgiveness under the previous administration’s program was turned down, which is not surprising, given that only 2 percent of applications were approved under Betsy DeVos’ Education Department.
If you’re like us, at some point you realize with dismay that even if you make the minimum payments until you die, you still won’t pay it off. You sort of understand what it must feel like to drown. You don’t exactly have to die to discharge student loan debt, but it can feel that way. Only in the past few years, when we were able to make much larger payments against the outstanding principal, have we made a dent in what we owe the government.
Certainly young (and older) borrowers understand that they will owe these funds when they graduate, but student loans are often the only avenue for many aspiring students to attend college or go on to earn advanced degrees.
Young people probably don’t anticipate that the accruing interest will make the debt unmanageable, especially for those who use their degrees to go on to work for the public good, like teachers or social workers. President Joe Biden’s order to forgive up to $10,000 of outstanding student loans and up to $20,000 for low-income students who also received Pell Grants is a smart investment in our country’s well-educated future. Most of the relief will benefit those earning less than $75,000 annually.
To the folks who argue that student loan forgiveness is an outrage because they themselves managed to pay their own way, or paid their loans back, or didn’t go to college, I would remind them that no government program applies equally to every American. If I don’t own a home, for example, should others not get mortgage interest deductions on their income tax? Should I have to pay taxes to fund a fire department if my house never catches fire? Should any child ever go hungry because I can afford to feed my kids?
Programs that lift up some people lift us all up, if only indirectly, by fostering a productive and equitable society. The entire American economy benefits from more participation by all Americans, not less.
Forgiving the amounts of student loan debt under Biden’s guidelines will be a drop in the bucket for some indebted former students, who may owe 10 times that amount. But by restructuring the terms of repayment, extending the freeze on interest accrual, and making loan forgiveness for years of public service more accessible, the program offers hope for many people who may have felt hopeless.
The argument that student loan forgiveness will somehow benefit rich, entitled Ivy League graduates ignores that fact that rich Ivy League students don’t take out loans in the first place. They don’t need to. Ninety-five percent of the debt forgiveness under this program will go to low-income students.
Protests about the $420 billion cost of the program are deceptive, as that amount is actually spread over 30 years. It will cost one-quarter of 1 percent of the annual federal budget, or one week of Pentagon spending, which seems a modest price for a world of good. Also, the cost is not a federal outlay of cash, but rather a lower amount of expected revenue from future repayments.
Finally, the argument that taxpayers will be on the line for fictitious and silly degrees like Sen. Ted Cruz’s "Queer Pet Literature" or Rep. Lauren Boebert’s "Lesbian Dance Theory" — ham-fisted stabs at both liberal arts degrees and the LGBTQ+ community with the same cheap knife — is insulting to those whose degrees may be in esoteric fields that nevertheless do benefit society. It's also just mean. Some politicians thrive on that malicious spirit.
I believe that, going forward, student loans should be interest-free: Students would have to pay back the principal they borrowed, but the government would fund the administrative costs.
Onerous student loan debt has kept many young people from buying homes and/or starting families, two of the many important ways in which each generation contributes anew to a healthy and sustainable society. It’s time we help them regain their chances to bloom and grow. The president’s executive action is one way to honor the pledge we Americans make to provide liberty and justice for all.