After a long delay, President Biden followed through on an important 2020 campaign pledge, when on Aug. 24, he announced his plan to cancel $10,000 in student debt for borrowers earning under $125,000 a year. Borrowers who received a college federal Pell grant, that are given to students who have the greatest need, qualify for up to $20,000 in debt relief. Biden has also extended a freeze on student loan payments one more time until the end of this year and cut minimum monthly payments in half for undergraduate loans.
Across the U.S., 45 million people owe $1.6 trillion in student debt, more than Americans owe on car loans, credit cards, or any consumer debt, other than home mortgages. Predictably, most Republicans condemned Biden’s student debt relief plan declaring that it doesn’t help Americans who never attended college and is unfair to students who have already paid off their loans.
While welcoming the president’s announcement many student debt relief advocates and progressives felt the plan did not go far enough and failed to address the skyrocketing cost of higher education. Between The Lines’ Scott Harris spoke with Cody Hounanian, executive director of the Student Debt Crisis Center, who assesses the strengths and weaknesses of President Biden’s student debt loan forgiveness plan.
CODY HOUNANIAN: This is a historic moment in our movement. This is the biggest student debt relief proposal ever achieved. We are proud that this president has delivered on his campaign promises to cancel at least $10,000 in student loan debt. And we feel that this moment opens the door for more relief in the future. This really sets a precedent that a president can use many different authorities to try to provide relief to student loan borrowers.
That’s all the good news. The bad news is we didn’t get everything that we had been fighting for. Namely, we didn’t believe that this proposal should have an income limit. $125,000 per individual, and $250,000 per family is the limit for this proposal. But we know, having talked to borrowers, there are many people who have a college degree that have higher-paid jobs, but the student debt is so high that monthly payment is so crippling that they haven’t been able to access the American dream in a way that their income kind of implies.
And so we thought that student debt cancellation should be across the board provided to everyone, regardless of income. And I should note, when it comes to this income argument as well, the research shows that black and brown borrowers may have higher income because of their education, but they have low wealth and low generational wealth because of systemic racism. So that part of the puzzle really doesn’t fly. And we’re going to continue to push for more relief for many other borrowers, including those with higher incomes.
Lastly, the other piece we didn’t want we do not want an application process because the system is broken. It’s hard to navigate. And unfortunately, borrowers are going to have to apply for this relief.
SCOTT HARRIS: And what do you make of the opposition we’re hearing? There’s no shortages of Republican politicians and media pundits criticizing President Biden’s initiative here, even though it falls short for many progressives around the country. And I think one of the main right-wing talking points we hear in response to this student debt relief is it’s unfair to force a blue-collar worker to pay for someone who got a Ph.D. in gender studies.
That’s one direct quote from one politician I won’t even bother mentioning, but that’s kind of like the conflict that the right-wing is setting up.
CODY HOUNANIAN: Well, you know, these politicians really don’t understand who’s impacted by the student debt crisis. The New York Times did an analysis and showed that this relief is actually the most targeted relief towards the middle class that this president has achieved so far. Student loan borrowers are not just wealthy kids from elite families in coastal communities like in California and New York.
Student debt impacts blue-collar workers across the country. You know, when I first started this work almost 10 years ago, we were hearing from many people —— blue-collar workers in middle America who were severely impacted by the Great Recession. And they went back to school on a promise that education could allow them to skill up and give them a second chance.
And instead, they got crushed by student loan debt. So those politicians really don’t know what they’re talking about, to be frank. And honestly, I’m also hearing from other politicians that do not deserve to be named — that somehow student debt cancellation is for slackers. And I could tell you, by the very nature of having student loan debt, that means you went to college, you were seeking higher education. You were ambitious, you worked hard, you had a dream for your future. These are the people that precisely have worked the hardest and really deserve access to the middle class, upper-middle class and the American dream.
SCOTT HARRIS: Cody, I wanted to ask you before we run out of time, what’s your advice to people listening tonight who are happy about this Biden policy on forgiving student debt, but at the same time want to work, as your group is doing, for wider and deeper policy solutions to the costs of education and making it sustainable.
CODY HOUNANIAN: That’s a really important question. Step one right now, enjoy this win. You know, it’s not often that we get this big and this transformative of a policy after a decade of advocacy. So let’s take a moment and applaud how much we’ve achieved and how far we’ve come. But that doesn’t mean we have to stop working. And I don’t want the public to start ignoring the issue of student loan debt just because we’ve had the biggest win in our movement.
So what we need to do is we need to double down on our call for additional cancellation. That means calling your lawmakers. That means continuing to do all of the things you typically do to get attention, like sharing your stories and signing petitions. We need to do that now more than ever because they’re finally listening. And so I urge your listeners to continue to be dedicated to advocacy around student loan debt and continue to think about how you can share your story to try to create additional relief.
For more information, visit the Student Debt Crisis Center at studentdebtcrisis.org.
Listen to Scott Harris’ in-depth interview with Cody Hounanian (18:53) and see more articles and opinion pieces in the Related Links section of this page.
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