Student Loan Forgiveness Critics Are Wrong About Who Benefits and Why

[Yo_Mama_Been_Loggin]

In late August, the Biden administration announced that it will cancel student debt: $10,000 worth of federal student loans for those earning $125,000 or less and $20,000 for Pell Grant awardees under that same restriction. The administration also announced that under a new income repayment plan it will cap repayment at 5% of one’s discretionary income and discharge any existing debt after 10 years, down from 20 years.

Democrats are using the momentum from the announcement as a way to potentially gain some political ground ahead of the midterm elections in November. Strategically, that is the right move. Giving people oxygen in an already tight space is definitely a win and will yield dividends.

But air should not be scarce in the first place. The current proposal is good, but there is still room for improvement, because America’s student debt crisis begins and ends with Black women, who — even after this announcement — still bear, on average, the highest burden. According to the American Association of University Women, or AAUW, Black women have the highest amount of student debt while having the lowest returns on their college degree.

Fifty-seven percent of Black women repaying student loans in 2016 reported that they were unable to meet essential expenses. This is not surprising. In 2020, Black women earned 63% of what white men earned, while white women earned 79%. Not to mention, research shows that the median amount of wealth for single Black women with a bachelor’s degree is only $5,000, and $500 for those with no degree. What’s more, as University of North Carolina at Chapel Hill professor and New York Times opinion columnist Tressie McMillan Cottom has pointed out, many Black college students accrue debt even if they don’t graduate. It’s a crisis of epic proportions.

https://www.teenvogue.com/story/student-loan-forgiveness-critics

[dugog55]

1. I think a much cleaner and cheaper solution to student debt, that would be accepted by both parties

would be to pay off everyone's interest payments and refinance all the loans at a 1 or 2% interest rate. Most people do not know that student loans, other that the subsidized Stafford loans can run up to an 8% interest rates. That is ridiculous. Even smaller loans of 30K at 8% is crippling, that is $200 a month just to keep up with interest, not touching the principal. Most students that continue their education after four years to get a doctorate, JD, or any other degree requiring more than four years of college can easily have a loan in the $100K to 200K range. At 8% interest, they will not even be able to keep up with the interest payments. They will be paying on those loans the rest of their life. With no way out of debtors prison. This is completely unacceptable.

At a much lower interest rates, students can start making a dent in their actual loan amount and not just keep shoveling money into an abyss of interest payments. With this system, the students will still shoulder the load of their schooling costs, but would actually have a chance to see the end of the tunnel down the road. And they won't be throwing thousands of dollars down the toilet on interest payments. Frankly, I do not see how Congress allowed this to get out of control in the early 2000's. They should all be ashamed of themselves.

[IbogaProject]

2. Easy the typical student debtor doesn't donate what the typical University Administrator does

.