Hard work ought to be rewarded and good news should be celebrated.
President Biden’s announcement that millions of student loan borrowers could see some of their federal loan debts forgiven recognizes the hard work they put in to get an education and the personal responsibility they took on to pay for it.
It is also good news to be celebrated, not just by the borrowers who’ve been treated unfairly by the system or by the advocates who’ve been fighting for reform, but by everyone who believes higher education should be a path to economic opportunity and not a sentence to decades of crushing debt.
Too often we’ve watched policy makers stand idly as student loan debt grew into a crisis with over 43 million borrowers holding a collective debt nearing $2 trillion dollars. Generations of students, their parents and their families have seen their pursuit of a degree leave them mired with debt instead of paving the way to prosperity.
They’re in this situation because the system is broken. While tuition rises, financial aid for eligible students falls, covering a smaller and smaller portion of their costs. While interest rates fell and bank profits and the interest collected by the federal government on loans spiked upwards, borrowers couldn’t and still can’t refinance their loans. And while greedy corporations and the wealthiest 1% are larded with tax breaks, student loan borrowers aren’t even able to discharge loans in bankruptcy.
We’re now seeing some progress in the fight to restore fairness for us … and it’s about damn time.
The research on the impact of the student loan debt crisis finds it keeps people from saving for their own children’s education or their retirement. It stands in the way of starting their own small business or buying a home or a car. It even affects when people decide to marry or start a family. And the student loan debt crisis is only magnified by the inequities of our country’s racial wealth gap.
The announced loan forgiveness provisions of up to $20,000 to Pell Grant recipients and up to $10,000 to non-Pell Grant recipients earning less than $125,000 per year or households earning less than $250,000 will have real financial meaning for real people’s lives.
Extending the current federal student loan pause through Dec. 31 provides help now, while other reforms included in the Biden plan will help in the future. An income-based repayment plan will cut in half the payments for eligible lower and middle income borrowers, from 10% of their earnings to 5%. Publishing a “watch list” of the schools with the worst debt outcomes will help prevent future debt traps. A proposal to reinstate rules requiring accountability for student outcomes for career programs will likewise help weed out scams.
Make no mistake, the same politicians who’ve stood in the way of addressing the student debt crisis are now blaming borrowers and scheming to undermine reform. From Wisconsin Sen. Ron Johnson, who has used his position in the U.S. Senate to enrich himself and his billionaire campaign donors, to millionaire Assembly Speaker Robin Vos, whose own $300,000 federal pandemic assistance loan was forgiven, there’s no depth of hypocrisy to which they will not sink as they seek to divide and distract the public from their malfeasance.
Perhaps the Republican angst over this initiative is because 0% of the benefit accrues to the top 1% while 75% of the help is for households with incomes below $88,000 annually.
Student loan debt is still a crisis. But for many of the nearly one million student loan borrowers in Wisconsin, and tens of millions more across the nation, their burden has become a little lighter and their path to prosperity a little clearer. That’s good news.
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