President Biden campaigned on student loan forgiveness, promising to relieve up to $10,000 in debt per borrower
s, Boston University Questrom School of Business executive-in-residence and a master lecturer in finance, considers if, and how, President Biden would forgive student loans. Williams, who has written about this subject previously, discusses who is impacted most by student debt, the politics of student loan forgiveness, and the effects of the current COVID-19 student loan pause.
Takeaways
- President Biden campaigned on student loan forgiveness, promising to relieve up to $10,000 in debt per borrower, but has yet to make good
- Biden has extended the current COVID-19 student loan pause, so interest is not accruing, but BU’s Williams is concerned about an increase in https://guaranteedinstallmentloans.com/payday-loans-ak/ loan defaults once the pause stops
- The average undergrad has $30,000 in college loan debt; some professional students have upwards of $200,000
Transcript
A year after taking office, Biden has yet to make good on his promise and is facing increasingly loud calls from advocates and members of his party to cancel student loan debt before the midterm elections.
Back in December, Biden did provide some temporary relief to borrowers when he extended the pause on federal student loan repayments through . The pause on payments was first implemented in under the CARES Act, and later extended by the Trump administration.
In this episode, BU Today executive editor Doug Most talks to s, executive-in-residence and a master lecturer in finance at Questrom, about the politics surrounding student loan forgiveness, and if and how Biden will forgive student loans.
Doug Most: s, thanks for joining us today. I wanted to talk to you about this question of politics first, and whether or not Biden should forgive, could forgive, or will forgive all, or none, or some of the debt.
On one side, President Biden has the progressives, including Senator [Elizabeth] Warren, who is asking for a $50,000 per loan forgiveness. And Biden had gone on the campaign trail and continues to agree to only a $10,000 forgiveness.
Newsclip: [Biden, as a candidate, speaking] I proposed, and in the House Nancy [Pelosi] put it in the plan, to immediately provide $10,000 in debt relief and stimulus right now.
Williams: It’s a huge difference; $50,000 forgiveness per loan would actually take away 80 percent of the debt, over a $1 trillion worth of the debt. The Biden idea of $10,000 per loan would give and take away about $400 billion. It’s still a big number, but there’s a big difference between the two groups.
Williams: What’s interesting, the undergraduate student, for example, on average takes on about $30,000 in debt. And if you’re a graduate student, you’ve upped it to around $70,000. You know, there are professions, like if you’re getting, for example, a medical degree, you may increase it to $200,000 in debt.
Dental school is almost $300,000. And nurses, if they go to graduate school, it’s almost $50,000 in average college debt. So these are individuals that are providing a lot to society as well, and yet they’re burdened by the student debt, which impacts their decision-making.
Most: Is one of the issues he is facing on the political side sort of a generational thing? Is there concern from people who won’t have their debt forgiven of how they’re going to react to the news that colleagues or other people are having their debt wiped out? How much does that play into this, do you think?
Williams: Well, I think it does play a lot into it because there’s over 45 million borrowers that have student loan debt. And these are borrowers of different ages. I mean, the average age of borrowers’ indebtedness is around 35. But yet, we still have a group of about 10 percent that are 60 years old and older. These are parents that secured debt for their kids, and they’re still actually sitting there on the hook and having to pay that debt off.
