“There is a misconception that the everyday American who doesn’t have student loans or paid them off finds student debt cancellation unfair,” said Cody Hounanian, executive director at the Student Debt Crisis Center (SDCC), a nonprofit focused on ending the debt crisis. “But in reality, polling shows that Americans find it unfair to go into debt for higher education in the first place.”
The Washington Post recently reported that the Biden administration, responding to public pressures, is weighing cutting at least $10,000 from student loan debt for eligible individuals. Top Biden aides are reportedly looking at income caps to grant relief to individuals earning less than $125,000 to $150,000, or $250,000 to $300,000 for couples filing taxes together.
Biden told reporters last week that he will make a decision on canceling student debt “in the next couple of weeks.” But he said that he is not considering $50,000 in forgiveness despite progressive Democrats like Senator Elizabeth Warren calling on him to do so.
Those who argue for greater student debt cancellation point out that this could help close the racial and gender wealth gap. Student debt is disproportionately held by people of color and women.
Yet opponents contend that people with high incomes hold a significant amount of student debt. So, those who would most benefit from broad-based cancellation may not be those most in need.
A recent report from the Federal Reserve Bank of New York took a closer look at these issues. The analysis found that the total outstanding balance for federally owned student loans, including defaulted loans, was $1.38 trillion as of the end of last year.
