President Biden this week announced plans to provide what he called “targeted debt relief” to student loan borrowers: “up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients.”
He limited the eligibility for the relief to borrowers whose “individual income is less than $125,000 ($250,000 for married couples).”
The Winter 2021 issue of Education Next featured a forum on student loans “The Fallacy of Forgiveness,” featuring contributions from both Beth Akers (“Tailor Debt Relief to Those Who Need It Most”) and Sandy Baum (“Mass Debt Forgiveness Is Not a Progressive Idea.”)
The call to relieve each borrower of up to $10,000 in debt would be akin to sending a check in that amount only to those with outstanding student loans. Quite a few people in addition to those who never went to college would be left out under such a policy: Borrowers who have just finished repaying their loans, for instance, and students who worked long hours to avoid borrowing. Imagine college classmates from similar families who borrowed similar amounts. Student A decided to work hard to pay off all his debt before following his dream to try to make it as a musician. Student B decided to travel around the world and postpone paying her loans. Now, under loan forgiveness, the taxpayers will repay Student B’s loans, but Student A, who paid back every dime on his own, will receive no such benefit.
In his remarks announcing the student debt relief plan, Biden also mentioned his other education policy priorities, which he has not yet achieved: “12 years of universal education is not enough. I’m going to continue to work for universal pre-K for every three- and four-year-old, and universal community college for education beyond high school.”