Student debt cancellation: What it means for loaners and the midterm elections

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Jake Wilsted

Biden’s plan can forgive ten thousand to twenty thousand dollars in student loan debt.

Jake Wilsted, News Editor

President Joe Biden announced a plan to forgive $10,000 to $20,000 in student loans in August, fulfilling a promise made on the campaign trail.

This action by the president caused numerous questions to surface. What are the aspects of Biden’s student loan forgiveness plan? Who does it benefit? How will this impact the economy? Does this influence voters?

The Biden Administration not only proposed a plan to provide relief for current borrowers but also future ones. First, Biden plans to forgive $10,000 to $20,000 for borrowers that make under $125,000 a year. He will also extend the pause on federal student loan payments until the end of this year. 

The Department of Education is also looking to lift the burden off future borrowers by drafting an income-based payment program. This plan would allow loaners to pay a percentage of their discretionary income–income left over after necessities are paid–back to the government at a rate of 5%.

Reactions to this student debt cancellation plan are mixed. In a poll of about 2,000 registered voters, only 48% of voters approved of Biden’s plan, while 9% were unsure.

Rachel Hart, a teacher at Pleasant Valley High School, has student loans and plans on applying for the forgiveness plan. Hart explains that she appreciates the federal support in paying back student loans. “We are all relieved because college is expensive. It helps a lot,” she said.

The controversy of student loan forgiveness has many wondering how this could impact midterm elections. Brent Keemle, a social studies teacher and advisor of Pleasant Valley’s Students for Political Action club, does not think Biden’s plan will have much of an effect on the turnout of voters or the results of the November 2022 midterm elections. “I could see a marginal increase in the turnout for voting. [Biden’s] measure is something that ultimately angers and frustrates both sides of the debate,” he said. 

While the student loan forgiveness plan does not directly apply to everyone, any scenario involving the forgiveness of debt will impact the economy. The possible forgiveness of loans of up to 45 million borrowers is a considerable amount of money given back to Americans by the government. 

Philip George, an economics teacher at Pleasant Valley, explained the impact that student loan forgiveness may have on the local economy, “The [impact on the] local economy will depend on how many people will get loan forgiveness. As people have more money, they tend to spend more money. It pushes prices up and increases demand for products,” he said.

The future of student loan forgiveness is uncertain. Midterm elections will have little effect on the future of student loans as the forgiveness plan is an act of the president and not of Congress. However, Keemle does not think that student debt is the problem that needs addressing. 

“I would argue student loan forgiveness is a symptom of a larger issue which is the increasing cost of secondary and postsecondary education. While forgiving debt is nice for people who receive it, you really need to address the rising cost of tuition. You’re not solving the root issue,” Keemle shared.

While many questions are yet to be answered, many students from Pleasant Valley High School and across the country will be taking out student loans for the coming year. While the future of student debt is uncertain, student debt is likely to remain a voting issue for those who take on loans to pay for postsecondary education.