With the recent inauguration of Joe Biden on January 20th, many Americans are wondering which policies Biden will enact first, along with what the immediate executive orders mean. One of the most notable concerns is what Biden will be doing to address student loan debt.
Currently, about 45 million Americans possess some federal student loan debt, with 92% of student debt being federal loans, and this number is only increasing as more and more jobs place a higher emphasis on a college degree, driving many Americans to take on debt.
On a short term basis, Biden has extended the pause on federal student loan debt that Donald Trump initially enacted as a Covid relief effort to September, with a day one executive order. Many are now wondering how long this pause will last and if it’s even worth it for them to pay debts if loan forgiveness is potentially on the table.
Currently, Biden has proposed forgiving $10,000 in federal student loans, regardless of their income level. This proposal has been met with criticism from some who believe that this is not enough money to truly move towards equity, with congressional Democrats like Chuck Schumer and Elizabeth Warren stating that Biden should shift to $50,000. The proposal has also been criticized by some who think that this is unfair to those who have already paid off their loans and doesn’t take into account the increased salary with a college degree that would help compensate and would stimulate the economy more than debt cancellation.
Although the Democrats control the House and Senate, the Senate Democratic majority is extremely narrow, making it more difficult to pass legislation on issues like these. For now, most experts advise those in debt to continue paying as they were before as Biden’s focus is primarily on the major economic and health crisis, with work on vaccinations, reopening schools, and providing relief for the unemployed. These factors make it unlikely for any more immediate action on student loans, but some steps will probably be taken once there is a better handle on the pandemic.