President Joe Biden (Photo by SAUL LOEB/AFP via Getty Images)
Should your student loans get cancelled?
Here’s what you need to know.
Student Loans
While President Joe Biden decides whether to cancel student loans, many student loans borrowers are wondering, “Will your student loans get cancelled?” In the near-term, the answer seems to be “no,” as Biden recently dropped student loan cancellation from his latest budget. At the same time, the question has become: “Should your student loans get cancelled?” The second question is trickier because it gets at the heart of the issue of student loan forgiveness. It seems that everyone has an opinion on student loan cancellation. Sen. Elizabeth Warren (D-MA) regularly tweets on the power of student loan forgiveness to stimulate the economy, reduce disparities, and help student loan borrowers break free from the shackles of student loan debt. Opponents of student loan cancellation say wide-scale student loan forgiveness is one big wealth transfer that is poorly targeted.
While there are many voices on student loan cancellation to highlight, here are two letters to the editor of The Oregonian that reflect key differences of opinion on student loan cancellation:
Student loan cancellation is a ‘responsibility’
Here are some key highlights from a supporter of wide-scale student loan cancellation:
- Cancelling student loans will stimulate the economy;
- Student loan forbearance from the Cares Act has totalled $5 billion per month and has provided student loan borrowers with a sense of finncial freedom;
- Student loan cancellation should be “answered with enthusiasm and expediency”;
- Paying off student loans is “practically an impossibility;”
- After paying her student loans on-time each month for 10 years, her student loan balance increased to more than $100,000.
- $50,000 of student loan cancellation would completely wipe out the student loan debt of 36 million student loan borrowers.
- Student loan debt affects “credit, income and planning for my family.”
- Leaders have a “responsibility” to cancel $50,000 of student loans.
Student loan cancellation means you haven’t made enough sacrifices
Here are some key highlights from an opponent of wide-scale student loan cancellation, who is directly responding to the first letter to the editor:
- Student loan borrowers made a promise to pay off student loan that they borrowed;
- Student loan debt help give you money to live and get an education, and student loan borrowers thought it was a good decision at the time;
- Now, student loan borrowers no longer want to honor that promise;
- Student loan cancellation means that hard-working members of the community have to pay off money that a student loan borrower borrowed and promise to pay off;
- Plenty of student loan borrowers can live on a budget, be intentional and make sacrifices to get debt-free;
- Before any student loan cancellation, “we should turn off the spigot” to future student loan borrowers so that they are not burdened financially;
- It doesn’t make sense to cancel student loans with one hand and continue to lend student loans with the other “if you truly believe that they are bad.”
Student loan: final thoughts
Student loan forgiveness is a hot topic and attracts a diverse set of opinions. If there isn’t any student loan cancellation, you can expect these 5 things. The supporter of student loan forgiveness views student loan cancellation as a moral responsibility that will stimulate the economy and create a more level playing field. The opponent of student loan cancellation also views student loan forgiveness as a moral issue, but it’s a moral issue to pay off a loan that you promised to repay. The opponent also raises an essential point: if student loans are so bad, why cancel student loans once and then keep lending them? Supporters would say that one-time student loan cancellation will level the playing field and provide essential financial relief, even if it’s imperfect. The larger question is whether student loan cancellation should be accompanied with corresponding higher education reform that addresses issues such as the cost of tuition, who pays and who should be held responsible when a student loan borrower defaults on a student loan.
If you have student loans, consider these options to help save you money:
