With the effects of the pandemic still taking its toll, the Biden administration announced that the student loan payment moratorium will be extended to May 2022. Currently, 89% of borrowers remain unable to meet their payments at this time or anytime soon. With the moratorium announcement, the issue of student loan forgiveness has been brought back into the forefront of public debate. The extension enacted is a step in the right direction and will help many borrowers during these financially uncertain times. However, loan forgiveness needs to remain an important goal for President Biden and the American people.
Forgiving student debt is both an economically and morally sound idea. Practically, the forgiveness of student debt could lead to a possible substantial increase in GDP. A 2018 paper from the Levy Economic Institute of Bard College states that an increase in annual GDP from 86 billion to 108 billion is possible with the one-time forgiveness of 1.4 trillion in student loan debt. Furthermore, debt forgiveness can aid in decreasing the racial wealth gap. When comparing Black students to white students, a startling 86.6% of Black students utilize federal loans at four-year colleges. The number of white students who do the same is significantly lower at less than 60%. The high costs of a college education are a much higher ask for families whose financial success has been impeded by centuries of institutional racism. Student loan forgiveness would be a major step toward leveling the playing field.
For President Biden, student debt forgiveness could be the boon his approval rating could use. Student loan forgiveness would also be a victory for Democrats seeking reelection in the coming midterms. Pressure from many members of the Democratic party to forgive up to $50,000 in student debt is well established. Senator Elizabeth Warren, Majority Leader Charles Shumer and Representative Ayanna Pressley held a press conference on the subject last February. Members of Congress, like Representative Pramila Jayapal, have also taken to social media to encourage President Biden to take action on student debt forgiveness. This issue has been growing in popularity among the breadth of Democratic lawmakers as opposed to just progressives. For some moderates who are approaching a tough reelection, action on student debt forgiveness will be a key issue.
The president campaigned on working toward forgiveness of $10,000 in student debt, but even that promise remains unmet. It seems that it is Biden’s intent not to utilize executive action and to allow Congress to craft the legislation on student loan forgiveness. This appears to be a large misstep considering how adept and willing Congress has been to thwart Biden’s political agenda and campaign promises. Additionally, Biden is in need of a political win in tandem with his low approval rating, which many hope will be loan forgiveness. As the Omicron variant emerges and Americans are feeling more and more like their lives are under siege, it seems that President Biden’s efforts are only minimally effective just as his predecessor’s lack of effort. It is coming down to who is vaccinated and who is not, and Biden’s ability to improve vaccination rates at this point is marginal at best. Since Biden took office, about 210,000 Americans have died due to COVID-19. Although this figure is lower than previous highs, this is a fact that will be touted loudly by Republican lawmakers and candidates during the 2022 midterms which will likely become a referendum on Biden’s effectiveness as a president.
Student loan forgiveness is the means in which this country will support its future generations and growth. It will allow families to become homeowners and begin to finance their children’s educational aspirations as well. It may also be the way that Biden sustains his presidency and Democrats keep their seats in congress. It is a moral and economic imperative that Biden expends political capital on this issue if only to support his Democratic colleagues, to keep the promises he made as a presidential candidate and to impress upon people the pricelessness of education today.