The Biden-Harris administration recently proposed a bill that would relieve up to $10,000 of debt per borrower of federal aid, and up to $20,000 for recipients of Pell Grants. The bill might face long legal battles to come into action, but the Biden-Harris administration promised that the relief will come before student loan payments are due in January of 2023.
CONCERNS REGARDING THE CANCELLATION
Even with the obvious benefits of canceling student debt, for many, ten to twenty thousand dollars is a fraction of their student debt. The relief money, which will add hundreds of billions of dollars to the national deficit, originates in ambiguity. According to Forbes, analysts debate over how the cancellation will affect the national deficit.
“Some express concerns about the negative effects that large amounts of national debt can have on the economy, including making it vulnerable to rising interest rates and increased inflation,” Forbes advisor Kelly Anne Smith said. “But others claim that our government has run on a deficit every year since 2001 without many adverse effects, and we wouldn’t see much of an impact from canceling student loans.”
Other critics include Senator Ted Cruz, who expressed distaste for those in need of student debt relief.
“If you are that slacker barista who wasted seven years in college studying completely useless things, now has loans, and can’t get a job, Joe Biden just gave you 20 grand,” Cruz said on his podcast, Verdict with Ted Cruz.
He also pointed out that this seems to be a targeted bill, incentivizing voters towards the Democratic vote in the spring of next year.
PROPONENTS FOR STUDENT LOAN CANCELLATION
Many public service and health care workers stand to benefit from the bill, which will allow many the financial freedom to rebuild finances that are often wiped by student loan debt payments. Bernie Sanders, a Democratic proponent, clapped back at Cruz’s barista comments in a tweet.
“Senator Cruz, let me introduce to you a group of nurses and working-class Americans who, in many cases, are working two jobs and over 40 hours a week just to pay off their student debt and pay for the basic necessities of life. No, they are not slackers. They deserve relief,” Sanders said.
