Student Loan Forgiveness
Aug. 25th, 2022 11:59 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
canyonwalkerPresident Biden announced student loan debt relief yesterday. Under this program the Department of Education will forgive up to $10,000 of federal student loans for borrowers under certain income limits. Borrowers who also received Pell Grants (a subsidy for low-income families) are eligible for up to $20,000 of forgiveness.
Biden's plan has supporters and detractors. The detractors are all over the political spectrum. From the left, people are saying it's not enough. "I'm 65 and have $300,000 of loans!" read multiple news headlines. From the right it's being called everything from unfair, to inflationary, to theft— and that's just in the mainstream media. I can only imagine the unhinged claims echoing around the fever swamps of conservative media.
The new program is not directly relevant to me; I paid off my student loans years ago. But there's an interesting what-if. What if a program like this were available years ago? What if I had just graduated recently and still had loans to pay off?
— I was fortunate to graduate with a relatively small loan balance. I qualified for academic scholarships that, together, covered at least two-thirds of my costs. Work during the year and during the summers covered at lot of what was left. I graduated after 4 years with loans of just $6,000. That was lower than the debt a lot of people graduating around the same time owed.
— Of course, $6k then is not $6k today. Applying a simple inflation adjustment doubles it to $12,000. College costs have risen much faster than the rate of inflation, though. Instead of merely 2x due to inflation it could be 4x if scaled proportionately to how the full cost of the private college (Cornell University) I attended has grown since then. So, maybe $24,000 if I graduated earlier this year.
— Even my hypothetical $24,000 loan is a light burden. Figures from the Education Data Initiative reported in a recent USA Today article indicate that the average federal student loan balance today $37,667. I think that represents the balance after people have already paid whatever they've paid. The average upon graduation would be higher. And the average upon graduation from an expensive private school would likely be a lot higher, too.
But let's go with the figure of $24k. That's like a new car loan. I'd be graduating from college and already owe as much as financing a new car. (And not a fancy new car, BTW. We're talking Toyota Corolla money here.) I'd welcome debt relief of $10k. It wouldn't pay off loans of $24k but it sure would make a big dent in them. Even if my loan balance were $40k, knocking out a quarter of that would be nothing to sneeze at. Edit: $10k is $100-200/month depending on term. Not a huge amount, but enough to make a difference for anyone struggling to pay for basics each month. I'd sure appreciate the government giving me a hand-up as I started my career.
Biden's plan has supporters and detractors. The detractors are all over the political spectrum. From the left, people are saying it's not enough. "I'm 65 and have $300,000 of loans!" read multiple news headlines. From the right it's being called everything from unfair, to inflationary, to theft— and that's just in the mainstream media. I can only imagine the unhinged claims echoing around the fever swamps of conservative media.
The new program is not directly relevant to me; I paid off my student loans years ago. But there's an interesting what-if. What if a program like this were available years ago? What if I had just graduated recently and still had loans to pay off?
— I was fortunate to graduate with a relatively small loan balance. I qualified for academic scholarships that, together, covered at least two-thirds of my costs. Work during the year and during the summers covered at lot of what was left. I graduated after 4 years with loans of just $6,000. That was lower than the debt a lot of people graduating around the same time owed.
— Of course, $6k then is not $6k today. Applying a simple inflation adjustment doubles it to $12,000. College costs have risen much faster than the rate of inflation, though. Instead of merely 2x due to inflation it could be 4x if scaled proportionately to how the full cost of the private college (Cornell University) I attended has grown since then. So, maybe $24,000 if I graduated earlier this year.
— Even my hypothetical $24,000 loan is a light burden. Figures from the Education Data Initiative reported in a recent USA Today article indicate that the average federal student loan balance today $37,667. I think that represents the balance after people have already paid whatever they've paid. The average upon graduation would be higher. And the average upon graduation from an expensive private school would likely be a lot higher, too.
But let's go with the figure of $24k. That's like a new car loan. I'd be graduating from college and already owe as much as financing a new car. (And not a fancy new car, BTW. We're talking Toyota Corolla money here.) I'd welcome debt relief of $10k. It wouldn't pay off loans of $24k but it sure would make a big dent in them. Even if my loan balance were $40k, knocking out a quarter of that would be nothing to sneeze at. Edit: $10k is $100-200/month depending on term. Not a huge amount, but enough to make a difference for anyone struggling to pay for basics each month. I'd sure appreciate the government giving me a hand-up as I started my career.
