An argument for student loan forgiveness

Photo credit: Julia Monteiro Martins

Have you ever carried the burden of being told “you should really go to college,” when you couldn’t afford it? I have. I always wanted to go to college but never wanted the debt that trickled along with it, nor did I have parents who could pay for it. So, I chose community college and later had the opportunity to transfer to University of Miami on a scholarship. Now, here I am.

I guess you could call me one of the lucky ones. I am a first-generation college student, who is able to attend college due to smart financial decisions and government assistance. Without both factors, chances are you would not be reading my article right now.

Meanwhile many other students, in similar financial situations to myself, feel forced to forfeit the idea of college because they are not offered opportunities like scholarships or enough financial aid. For other students, going to college starts out as an opportunity to become qualified for higher paying career sectors but quickly turns into a money pit.

Recently, President Joe Biden announced a three-part plan to provide relief to “America’s working families.” This plan consists of debt cancellation in some cases, extension on the pause of federal student loan repayments, cutting monthly payments in half, the largest increase to Pell Grants and overall makes the student loan system more manageable for current and future borrowers.

Like every political decision, there has been debate. Is this plan fair for everyone?

Iowa’s Republican Governor, Kim Reynolds, said in a statement.

“President Biden isn’t canceling student debt, he’s shifting the costs to the taxpayer and to those who worked to pay off their loans in full.”

False. In order for taxes to pay for Biden’s debt forgiveness plan, Congress would have to pass a bill amending the governing law of federal tax collection known as the Internal Revenue Code (IRC). All of which has not taken effect nor has even been proposed. Not to mention, The White House has stated that the loan forgiveness is fully paid for due to a drop in the federal deficit. A huge factor in this drop is temporary pandemic relief spending ending, causing federal spending to decrease at an exponential rate.

In fact, our government has run on a deficit every year since 2001, and with pandemic relief ending, leaving room for Biden’s forgiveness plan, we will still see federal spending decreasing.

Well, what about Inflation?

Moody’s Analytics chief economist Mark Zandi estimates that the combined impact will reduce real gross domestic product (GDP) in 2023 by 0.05%, drive down unemployment by 0.02% and cut inflation by 0.03%. The forgiveness plan will cause little to no effect economically but will make a huge difference in many American lives individually.

Senate Minority Leader Mitch McConnell joined in on the uproar, saying the move was a “slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt.”

The anger is understandable. It feels as if the people who haven’t yet paid off their student loans get a “freebee” while those who worked hard to pay off their loans or used none at all got cheated. Some may say “if I would have known, I would have waited.” The key word is “if”. What If Biden never put this plan into play? You would most likely be happy you made the conscious decision to handle your debt early or graduate with no debt at all.

When you donate money to an organization, it normally does not benefit you, other than making you feel good, for doing good. Why in a situation like this, where part of this plan is to take away debt from Americans who are struggling with their loans, the unaffected have a problem with it?

It’s also important to highlight that the cost of a four-year public or private college has nearly tripled since 1980. According to the Center on Budget and Policy Priorities, Pell Grants used to cover nearly 80% of the cost, but now they only cover a third. Like me, there are many students who have no choice but to borrow money if they want to get a degree. This makes certain universities and careers seem impossible for those coming out of lower income families.

Let’s also acknowledge that the debt American college students carried thirty years ago was far different than the debt students are dealing with today. A majority of high paying jobs not only require a bachelor’s degree but postgraduate school, which is even more of a financial burden.

Some people miss out on pursuing their dream job because they already have immense debt from their undergraduate degree and, having to pay off those loans along with keeping up with their cost of living, just do not see graduate school as a possibility. Biden’s three-part plan may offer hope and make it so that selective career sectors are more attainable for students who have the qualification but lack the funds.

Many who oppose this plan focus the majority of their arguments on one part- loan forgiveness only for some- yet do not acknowledge how Biden’s plan will benefit society as a whole. It includes strengthened accountability from colleges, including publishing an annual watch list of the programs with the worst debt levels in the country, so that students registering for the next academic year can steer clear of programs with poor outcomes.

Programs like this will help protect taxpayers when it comes to college prices, keeping them reasonable and ensuring borrowers get value for their investments.

So, while some believe it is a temporary solution, when analyzing the full plan, it offers long-term benefits. It is not only taking debt away from some Americans, but it is enabling them to put the generations after them in better positions. By cutting loan payments in half, it gives everyone who has borrowed money or will have to borrow money in the future, the ability to better manage their finances and get their degree without going under water.

If you are still opposed, you’re lacking a sense of patriotism. Policies like this are put in place to better the educational system and country as a whole, not just about the individual.

There is still a lingering question that bothers many: Just because I can afford my four-year degree means I should have to pay it in full while others get a break?

77% of students from high income families graduate from college compared to a mere 9% of graduates from low-income families. If we want these numbers to change, we first need to present the opportunity to do so.

I never said it was fair, but is less funding to schools in high poverty areas fair? We could go back and forth all day, but this plan does improve Americans’ quality of life. It puts America one step closer to giving the less fortunate the opportunity to be able to pay for their children’s or grandchildren’s college degrees in full.

If you are tired of people relying on government assistance, you need to give them opportunities to get ahead and stay ahead so the next generation does better. It’s a step in the direction of breaking a cycle.

When a child is born, they do not pick the quality of life they’re born into but putting them in a position to make it better, like Biden’s plan will, sounds like a good deal to me.