$1.6 trillion. That’s how much money 45 million Americans collectively owe in student loan debt. Think about it — how many people do you know who are still paying off their loans? Chances are, you and a bunch of your friends and family are still paying off loans. And given COVID, that isn’t something that is likely to change for a long time. Because of the economic hardship paying back student loans puts on most Americans, more members of the government are pushing the Biden administration to to cancel student loan debt. And while Biden is okay with cancelling some of it, for the benefit of all borrowers, he needs to cancel all of it. And soon.
As of right now, Biden is likely to forgive $10,000 per borrower. And while that’s a nice start, for a lot of us suffering from student loan debt, that amount wouldn’t do much of anything. It might cut down some of the interest, but for people who do not make a lot of money and can barely afford the bare minimum, they won’t even notice that $10,000 is missing. That might be a nice enough break for those who are just graduating. But if you’ve been out of college for a while, it won’t do much. And while Biden has extended the pause on paying back student loan debt due to COVID, if they’re not also pausing interest, that money will likely just cover it. Which means that borrowers won’t even get ahead with this level of forgiveness.
If you’re someone who works a low earning job like retail, or if you’re in an industry where you don’t make a lot, paying back your student loan debt is hard. Sometimes it feels like you’re working simply to keep a roof over your head and pay back your loans. And if you live in an expensive city, your living costs might make paying your loans back impossible. Not because you don’t want to, but because you simply don’t have the means to. If you’re working 30+ hours a week and struggling to make ends meet, paying back your loans may be an impossible task. And if you’re in such a precarious financial situation, Biden’s $10,000 solution isn’t really made for you anyway.
My partner and I have a significant amount of student loan debt between the two of us. I have been in default on my loans for most of the time I’ve been out of college. And while my partner has been able to pay on her student loans steadily for the last few years, she is still just paying off the interest and hasn’t even touched the actual amount she owes. Both of us have had fairly steady jobs in the last few years, but it’s still not enough. We would, of course, be grateful for Biden’s $10,000, but it really wouldn’t make any difference in terms of our repayment. We’ll still be paying them off for what feels like the rest of our lives. Having student loan relief would really change the way we could live our lives, and we aren’t talking about tropical vacations, we would be happy with an emergency fund to help cover the cost of surprise, unplanned expenses.
For us and others like us, the only way we can really get ahead is to have the government fully cancel student loan debt. And before you make any sort of comments about us having made an agreement, blah, blah, blah, here’s the thing. You can sign a contract and make an agreement with the full intent of honoring it. But then things happen that impede you from being able to do what you agreed to. As a nation, we’re told that the only way to get ahead in life is to go to college and get a good job. But then you have hundreds of thousands of people walking around with college degrees and working in retail because it’s impossible to get a job that pays well enough to keep up with your student loans. Since we’re doing as we’ve been told, since we’ve earned the education that should open opportunities for us to give back to society, the government should offer us some relief.
I’m a millennial, and my generation has been accused of killing industries such as diamonds, washing machines and chain restaurants. We often get criticism for not buying houses, not having kids and living at home longer than previous generations. But we’re a generation who is facing incredible amounts of student loan debt and struggling to find well paying jobs. Pair those with the crushing amount of loans we’re paying back, and there’s no way we’re ever going to get ahead unless something changes.
“With their student loan payments cancelled or reduced, these borrowers could have more spending money from month to month, allowing them to more actively participate in the economy,” personal finance expert, Rebecca Safier, who is also a certified student loan counselor at Student Loan Hero, told HuffPost.
Millennials are delaying at least one major life event, according to a survey by Bankrate. They’re putting off saving for emergencies in the highest numbers (38 percent) which could put them in a more precarious financial situation in the future. Putting off buying a home (31 percent) and not paying off other debt (28 percent) are the other big things we’re not doing. Of course we’re not. Because student loan debt affects all of that. If the bulk of your income goes to paying off student loans, you’re not saving money to do much else. But if you’re not paying off other debt in a timely fashion, you can’t get enough credit to do things like buy a house or a car.
Beyond Biden’s current plan, there are other resolutions in the Senate and House that address student loan debt. They would cancel a more significant amount of debt, which would create a stronger impact. Elizabeth Warren and Senate Majority Leader Chuck Schumer’s resolution would cancel up to $50,000. And in the House, Reps. Ayanna Pressley, Ilhan Omar, Alma Adams and Maxine Waters have come up with a companion resolution. It’s hard to say if these will go any further than Biden’s $10,000 plan, but since he’s leaving it up to Congress, maybe there could be some sort of leverage there.
Canceling student loan debt isn’t just an issue for people with student loans. We’re the ones who are struggling the most, but it’s an issue that affects us all. If all of the debt is cancelled, think about how much more people can do. Without that debt hanging over their heads, they can do things like buy houses and save for retirement. If we aren’t saddled with debt, our children won’t be either. Student loan debt doesn’t have to be a weight hanging around people’s necks anymore. If the government really wants to stimulate the economy, they’ll cancel it all. Because if they can bail out big business, they can bail out the millions of people drowning under the weight of student loan debt.