President Joe Biden has recently been under political pressure when it comes to canceling student loan debt, especially considering it was a major element of his campaign. After extending the pause on student loans many times and with midterm elections looming, many speculate there will be some sort of cancellation of student loan payments.
There are several different outcomes that could result from the decision the president has to make. Although nothing has been completely approved yet, the Biden administration is said to be working on moving forward with Biden’s promise to cancel debt.
Many are expecting debt cancellation to be tied to income. Those earning less than $125,000 annually would get some amount of student loan cancellation. Though an official number is yet to be announced, Biden originally stated he was looking at $10,000 or more in relief, despite progressives hoping for a greater amount.
Although many support the idea of debt cancellation, some disagree with the potential parameters. A $125,000 income cap is well above both the average income in the U.S. and the average entry level income for college graduates. A cap that high could potentially help those who are already on the path to thriving financially gain an even higher advantage. Canceling debt for those with higher incomes would only raise inflation and the cost of higher education. Therefore it would not only hurt individuals with lower incomes but it would bring up the cost of goods and services for everyone due to an increase in inflation.
Senior Vrindha Vegiraju explained her thoughts on the matter. “An ideal solution would include a way to understand how everyone is paying for their college, who actually needs relief for student debt and how much,” she said. “This way we wouldn’t be giving out more money than needed but still would be providing help to those who do need it.”
When dealing with millions of people, the money that affects their lives and taxpayer dollars, it is impossible to make everyone happy. Different decisions made by the government will affect everyone differently, only adding to the importance of the decision.
PV alum and sophomore at the University of Iowa Preksha Kedilaya is in support of the idea of student debt relief but has a couple concerns. “I think it would be a very big weight lifted off of many students facing student debt, especially to those who have an unfathomable amount of money to pay off,” she said. “I will say however this debt relief idea raises some concerns of inequity; lots of people have had great amounts of debt and have worked hard to pay it off.”
Although Kedilaya does have a concern when it comes to student debt relief, she believes the benefits outweigh the drawbacks. “There is also a diversity aspect to this; relieving $50,000 of student debt for example could improve the number of students of color with lower income families that attend college,” Kedilaya said. “This is a step in the right direction, but I believe the real problem stems from the crazy price tag on a four year degree.”
No matter what decision is made, the fate of college students and graduates’ financial future is in the hands of Biden and his administration.
