President Joe Biden on the South Lawn of the White House on Feb. 16, 2021.
Drew Angerer | Getty Images News | Getty Images
President Joe Biden has essentially ruled out forgiving $ 50,000 in student debt per person – a disappointment to some student borrowers who counted on that help.
“I didn’t have my hopes for it,” said Joshira Maduro, 30.
The research analyst graduated from Lehigh University in 2012 with a bachelor’s degree in finance and marketing and a student loan of $ 132,000. Since then, she has had a strict budget to pay for her monthly payments.
The payment hiatus on federal student debt during the coronavirus pandemic has provided Maduro, who lives in Charlotte, North Carolina, with a rare opportunity to clear out the balance of her top loans and even build an emergency savings fund.
Meanwhile, the president’s proposal to forgive up to $ 10,000 in student debt per borrower, which is still on the table, would go a long way toward reaching even bigger financial milestones, Maduro said, such as buying a car or saving. for the down payment on a house.
“That’s essentially a whole year of payments that were going to be handled,” she said. “Even if I saved a whole year of that money – I know if something happens, I’ll be sure I can come back.”
$ 10,000 would just surface for many
For others, $ 10,000 would be just a drop in the bucket. Kimberly Chatterjee, 29, took out about $ 200,000 in loans to attend New York University and graduated in 2014 with degrees in English and acting.
Until the pandemic, the New York City resident had worked full-time as an actor, paying off about $ 50,000 in debt. Even now, although she is unemployed and her payments have been interrupted due to Covid, she is trying to save some extra money and pay off her student loan debt.
Kimberly Chatterjee, 29, paid off $ 50,000 of the total $ 200,000 she borrowed to go to NYU. Forgetting $ 50,000 in education debt would be “life-changing,” she said.
Kimberly Chatterjee
Chatterjee opposed President Biden’s argument that he should not forgive $ 50,000 in debt to people attending elite schools.
“The idea that only the rich people go to the fancy schools is absolutely untrue,” she said, adding that her degree also opened many doors for her in the performing arts. “In terms of my career and the work I have been able to do, it was totally worth it for me and a decision I would not change.”
What would it mean to forgive $ 50,000 of her total debt? “It would change lives,” she said.
How far would $ 50,000 in loan forgiveness go
Certainly, many argue that canceling student loan debt is unfair to those who have paid off their loans or made other decisions about higher education.
“There is a fairness problem,” said Scott MacDonald, author of Education without debt. So many people have worked so hard to pay off their debts – people who didn’t go to college they wanted because they couldn’t pay it or haven’t had a vacation for years. ‘
But others argue that canceling some of the total $ 1.6 trillion in outstanding student loan debt would benefit the economy and many Americans from all walks of life.
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If all borrowers on a federal student loan were to be forgiven $ 10,000 of their debt, about a third of federal student loan borrowers, or 14.4 million people, would see their balances reduced to zero, according to higher education expert Mark Kantrowitz. If $ 50,000 in education debt were forgiven, it would wipe out all debts of 80% of borrowers, or about 36 million people, according to Kantrowitz.
Studies also show that low-income borrowers, women and people of color struggle the most with student loans – a pattern that only worsened during the pandemic.
And those asking for $ 50,000 in student loan waivers say a lower amount wouldn’t go so far as to close the racial wealth divide experienced by black and brown Americans, who have more education debt than their white counterparts.
Demetrius Amparan, 30, is from Chicago’s South Side and the Donor Relations Manager for Young Chicago Authors, a nonprofit.
Demetrius Amparan
When Demetrius Amparan, 30, came to Valparaiso University, he seized the opportunity to attend the school as a first-generation student from Chicago’s South Side. His parents couldn’t help him pay for school, so he signed up for all the loans the university offered him.
“For black and brown people like me, [higher education] is like the most valued thing we can achieve, ”said Amparan, who still lives in Windy City and graduated in 2012 with degrees in communications, public relations and sociology.
Now Amparan, the Donor Relations Manager at Young Chicago Authors, owes more than $ 96,000 in student loans. As a nonprofit, he has never been able to consistently pay the high monthly payments of his outstanding loans, especially since he has two young daughters aged 7 and 10, whom he takes care of.
He found Biden’s argument against canceling $ 50,000 in debt misplaced, he said, especially since he knows how much that kind of relief would help his community.
“It struck me pretty hard when I heard it,” said Amparan.
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