Katelyn Umholtz still owes nearly $25,000 in college debt. Umholtz said when she first heard the news that President Joe Biden was ordering partial forgiveness of student loan debt like hers, she immediately texted her family in celebration.
“This is a big and exciting deal for us,” Umholtz told VOA. “My sister also has a lot of student debt. We came from a low-income family and our father told us that taking out loans was the only way to go to college.
According to US government data, Americans owe a combined total of $1.6 trillion in college debt, nearly equivalent to the size of the entire Australian or Brazilian economy.
In August, President Biden gave hope to tens of millions of these borrowers. He announced that the government would forgive $10,000 in federal student loan debt for any American who earns less than $125,000 a year. Loan recipients who received a Pell grant — typically for low-income students who demonstrate financial need — would have an additional $10,000 forgiven in the president’s plan.
The excitement came to a head last week when the program’s online application went live. Already more than 22 million people have registered via the digital form.
For borrowers like Umholtz, there is hope that partial student debt forgiveness could provide critical relief as the crippling cost of living rises and record inflation hampers Americans still trying to recover from the economic ramifications of the coronavirus pandemic.
“I’ve never missed a student loan payment,” Umholtz said, “but the payments are high, as are rent, health insurance, and other living expenses. I’ve incurred medical debt and I have incurred credit card debt I hope that canceling my student loan will give me space to pay off these expenses and then, maybe one day, to think about starting a family or buying a house. I haven’t been able to save for it yet.
Despite progress in Biden’s plan becoming a reality, student loan forgiveness is not yet guaranteed. Six conservative-leaning states filed a lawsuit arguing that the president’s program would hurt businesses handling federal loans.
On Friday, a federal appeals court temporarily blocked the write-off of any debt until it deliberates on whether writing off student loan debt falls within the president’s authority.
In fact, for all Americans celebrating Biden’s push, many others scoff at it as an example of wasteful spending during a time of mounting national debt and economic turmoil.
“I think this could all potentially be a publicity stunt to help the president’s Democratic Party in the midterm elections in a few weeks,” said Angelica Garcia, a Republican voter from Saginaw County, Michigan. “If we want to help the economy, this is not the right way to do it. These are unnecessary expenses and will have disastrous consequences for the future of our country.
Political analysts say disagreement over the wisdom of partially canceling student debt is being split the same way as many issues in the United States — along political lines.
“The distribution is really exactly as one would expect,” explained Robert Collins, professor of urban studies and public policy at Dillard University in New Orleans. “The vast majority of Democratic voters — who are also the most likely to go to college and support economic aid for those in need — favor canceling student debt. The majority of Republican voters are against it.
A poll last month by Economist/YouGov confirmed this, showing that 80% of Democrats supported canceling college debt while 72% of Republicans opposed it. Independent voters — particularly significant because they are less likely to have voted for one of the two main political parties — were split almost exactly in the middle with 44% in favor of Biden’s student debt plan and 42% against.
At the heart of the argument of many college debt relief proponents is the belief that student loan providers act in a predatory manner against borrowers — many of whom are just children when they agree to terms. of the loan.
“When you take out a loan for a car or a house, you are an adult,” Liz Skelding, a teacher in Glastonbury, Connecticut, told VOA. “But I was 17 when I signed my student loan papers. No one explained the terms to me. No one explained how the interest will accrue so I can never get out of debt. I was 17!”
Natalie Krusemeier, a middle school teacher in Ethete, Wyoming, took on $70,000 in student debt to earn associate’s, bachelor’s and master’s degrees. She agrees that the current interest rate structure makes it difficult to repay university loans.
“I’ve made my student loan payments every month, but what do I need to prove?” she asked. “After the tens of thousands of dollars I paid, I kind of owe $12,000 more than when I started paying back. Everything I paid goes toward interest. It does not work. We need help.”
A matter of fairness
For many who have already paid off their student loan or who never took out a loan to begin with, it seems unfair that taxpayers’ money is used to partially ease the debt burden of others while they themselves are not. have not received such help.
“I paid for my entire education myself,” Denver Mullican, a resident of Natchez, Mississippi, told VOA. “I worked while in college, then had three jobs every summer to pay for my education. Nine of my closest college friends worked and went to college at the same time.
In last month’s Economist/YouGov poll, a majority of respondents (56%) said they felt student debt cancellation was unfair to Americans who had already paid off their debt.
Collins, of Dillard University, said he believed a false narrative was to blame for the division on this issue.
“There’s this idea that canceling student loans is going to have a huge impact on the national debt or on increasing inflation,” he said, “but that’s not true. Your cost of gas, eggs and milk does not increase because a small student debt is forgiven.
“There’s also a narrative among conservatives that canceling student loans helps spoiled brats, wealthy graduate elitists,” Collins said. “As a university professor, I can tell you that is not true. Most of the people this will help are not from wealthy families, because then they wouldn’t need loans. This relief will go to people who can actually use the aid.
Impact on elections
While the current lawsuit of six Republican-led states has prevented the Biden administration from wiping out any debt, that hasn’t stopped them from continuing to encourage borrowers to submit their applications online.
“Amid Republican efforts to block our debt relief program, we are moving full speed ahead to be ready to provide relief to borrowers who need help,” the US Secretary of Education tweeted. Miguel Cardona.
“[It will not] prevent us from reviewing the millions of applications we have received,” he added in another tweet.
The last time the federal government launched a high-profile online presence was a decade ago, when passage of the Affordable Care Act (also known as “Obamacare”) necessitated the creation of an online market. The website crashed frequently and did not work in its early days, angering voters and embarrassing Democrats.
While some feared that the same could happen with online student loan application, so far this has not been the case.
“It took about two minutes,” Colleen LaFlamme, a musician from Lawrenceville, New Jersey, told VOA. “Incredibly easy. Simple. User-friendly. It was great.”
As the fate of the presidential order to cancel student loans awaits a ruling from the courts, many Americans are wondering how the plan will affect the midterm elections, just two weeks away.
“I think Biden is trying to falsely portray Republicans as heartless,” Michigan’s Garcia said. “He wants to force Republican politicians to block his measure. They’re blocking it because it’s bad for the economy, but it looks like they don’t want to help people in debt.
Although Dillard University’s Collins doesn’t think the student loan forgiveness will change anyone’s mind on who to vote for, he thinks it could have an impact on the election.
“This election is going to be about who can excite their base enough to show up and vote,” he said. “Student debt isn’t going to overturn anyone’s vote, but it could excite more Democratic voters to get out and vote. Whether that will be enough to have an impact on the election – we will find out soon.