Last updated on January 16, 2023
According to the Education Data Initiative, that is exactly how much money was owed in student loan debt in 2020. We often hear about how big of a problem student debt is; hopefully this statistic helps us all to contextualize it.
In response to this phenomena that has been classified as a national disaster, last month the Biden Administration announced a new plan to forgive student loan debt that would be put into action come October 2022. According to The White House, people making less than $125,000 a year (or families making less than $250,000 a year) will be able to apply for $10,000 in financial aid; applicants will receive up to $20,000 if they are Pell Grant Recipients.
The White House affirms that the plan will aid low and middle income, marginalized, and diverse communities which seems reasonable considering that low-income individuals and people of color are generally more likely to default on loans (Talk Poverty, Insight into Diversity). Hence, by aiding low to middle income groups, higher education becomes more accessible and social mobility is created. At face value, the plan helps those who need it most.
But there seems to be a dichotomy in this plan: if the plan’s beneficiaries already have degrees, then wouldn’t they be able to secure high paying jobs to pay off their loans?
Sadly, this isn’t the case. According to the WRAL, even though many students take out loans, only 56% of them are able to obtain the degree for which they took out the loan. This actually makes sense though given that (generally less privileged) students who have to take out loans are also more often subject to variables regarding family, health, and safety that would cause a student to drop out. On top of that, events like Covid-19 and recent hyperinflation have paved an even more challenging road to paying off debts.
Hence, by paying off the student debts of low and middle income individuals, many can be saved from debt they would have otherwise not been able to pay off.
But is this really the best solution? For starters, the median salary of those with bachelor’s degrees in the United States is just around $69,000 (NCES). However, Biden’s plan will aid those making below $125,000. So, if the government truly wants to aid those in need without overspending, it ought to set its threshold for qualification somewhere near the median salary of its intended beneficiaries. What’s more is that this does not take into account the 44% who have debt without a degree, meaning that many of those who need it the most actually fall under the median salary of those with degrees.
Another question to be raised is if we, as taxpayers, should be indirectly forced to pay for the education of others. In my opinion, the answer is a no.
For instance: we pay taxes to fund the military as insurance because we don’t know if or when we will need to be defended. We don’t have a choice as to whether or not we will be personally affected, so we are ok with paying for our nation’s collective security. The same can be said about other services we pay taxes for such as the police or the fire department.
However, the relationship between a university and a student is purely consensual- the individual consents to paying a fee in return for a degree. Because it is a choice to enter college, others are not obligated to assist you when that decision results in financial strain. On the other hand, when it comes to military or fire service taxes, we have the obligation to pay because those affected did not choose to be harmed and similarly, and the same may happen to us.
Here’s the thing: Biden’s plan is well intentioned, but it isn’t optimal since it helps more people than it needs to. And even if the plan creates good by helping those who need it, it doesn’t mean that using taxpayer dollars is the fairest way to do so.
But what will happen in the future with this plan? The answer is, most likely, not much. The Biden Administration stated that the plan would combat the rising price of tuition across the nation. Although it may solve the problems of millions in the status quo, in the long term it does very little to stop the trend of rising college fees for my generation and the ones to come. For that, stronger action must be taken.