Editor’s note: Trent Bunker was a former editor of the Daily. He did not contribute to the writing or editing of this article.
The White House announced Aug. 24 that it would forgive up to $20,000 in federal student debt for people with annual incomes below $125,000. The initiative will reduce debt for most borrowers by up to $10,000 and debt for Pell Grant recipients by up to $20,000.
The move is the Biden administration’s largest effort to ease the financial burden of college on students. In a fact sheet outlining the plan, the White House cited an increase in the cost of a college education and referenced a Department of Education analysis that finds the average undergraduate student is dropping out of college. university with $25,000 debt as deciding factors.
Jeffrey Zabel, an economics professor at Tufts University, said students who dropped out of college with loans are the target demographic for this policy, as nearly a third of student borrowers don’t have a degree. university, but still have debts to repay.
“[Debt forgiveness is] not necessarily [for] high-income loan holders graduating from four-year colleges,” Zabel said. “In fact, the majority are people who haven’t even graduated from college or even a two-year program who have been duped by these for-profit educational institutions who have done a terrible job of educating them and have very high dropout rates.”
Zabel added that cutting state funding for public colleges also exacerbates the problem of high tuition fees. President Biden made this point in his speech announcing the debt cancellation program.
“A large student population attends large public schools, and states have systematically reduced the amount of funding they spend on public schools, and [that has] increase in tuition,” Zabel said.
“It’s just a band-aid, and it’s just a short-term fix,” Zabel said. “The longer-term solution is to fix the high costs of higher education, costs that have really taken off in the last 40 or 50 years.”
Mark Lannigan, chairman of the Tufts Democrats and elected member of the Massachusetts Democratic State Committee, praised the debt cancellation program.
“I think there will be great economic benefits for people who can now afford to invest in a house, invest in a car, invest in a family… now that they’re not burdened with that loan debt. pretty oppressive student,” Lannigan, a senior, said.
Lannigan also noted the popularity of student debt forgiveness among voters.
“In terms of politics, I just think it’s one of the most popular things that [Biden] could have done,” Lannigan said. “Student debt forgiveness has extremely high approval ratings among voters.”
Recent Data for Progress and NPR-Ipsos polls showed that the majority of Americans support canceling student loans. Meanwhile, 59% of Americans worry that forgiving student loans will make inflation worse, CNBC reported in August.
Trent Bunker, vice president of Tufts Republicans, criticized the cost of the policy, citing a study by the Wharton School at the University of Pennsylvania which estimated that the loan forgiveness program would cost between $469 billion and $519 billion. over a 10-year budget window.
“At the national level, the debt cancellation plan will harm future borrowers by further increasing tuition fees, adding to the suffocating national debt, imposing even greater inflation on the American public, and potentially exacerbating inequalities in income,” Bunker, a sophomore, said in an email to The Daily.
Bunker suggested that the accessibility of federal loans has contributed to the high cost of college education.
“Years of cheap government-backed loans have allowed universities to charge increasingly exorbitant prices at a rate above inflation,” Bunker said.
Bunker explains that some Americans will receive disproportionate benefits from student loan forgiveness, arguing that the policy will unfairly benefit wealthy students.
“The majority (62.23%) of the benefits of loan forgiveness will be reaped by those in the middle and top quintiles, while those in the bottom two quintiles will receive less due to different levels of college attendance,” Bunker wrote in a statement. E-mail. daily.
Zabel pushed back on a Republican talking point that politics unfairly benefits wealthy students.
“The Republicans are pushing this [the decision] It was totally unequal and it increases inequalities because it is really the rich who benefit from this forgiveness. … It just isn’t,” Zabel said. “When you really look at the numbers, a lot of people who get [relief] are minorities [and] lower income. »