Absolving Student Debt

   President Joe Biden announced in August the wide-scale student loan forgiveness. Biden also said that he would extend the ongoing student loan pause once more. Federal student loan borrowers can have up to $20,000 of their debt forgiven. Biden loan forgiveness plans to cover over $20,000 for Pell grant recipients and $10,000 for loan holders, for people who have met the requirements.  To be eligible for loan forgiveness, they will have to have a 2020 to 2021 adjusted gross income, or AGI, of less than $125,000 per person and $250,000 per household income. People wanting to apply for loan forgiveness have to apply for it but the form has not been released yet. The Education Department said that it should arrive early October 2022. It’s expected to be an online form with a paper copy more later. After you have applied for loan forgiveness, it should be applied to their loan balances within four to six weeks.

  Who will pay for the student loans? Elliott Hopkins, a Ridgeview History teacher thinks that, “money doesn’t pop up out of nowhere… The government is going to have to print more money which is bad because we’re already $33 trillion dollars in debt.” The tax papers will ultimately probably have to foot the bill for the forgiveness. At this point Biden has not stated who will foot the bill.

Hopkins is currently 14 to 15 thousands dollars in debt and  he knows the struggle with paying off student debt . Hopkins thinks that absolving student debt sounds like a, “fantastic idea, the problem with absolving student debt is that the money to pay for student debt does have to come from somewhere”. 

There are positive effects with the absolving student debt. Young adults who are in debt are being prevented from buying a house and having kids, although with Biden passing the  absolving student debt, it can help them save money to buy a home or even raise a kid. It can also help people with lightening financial burdens, especially people who come from low-income households.

There are also negative effects with absolving student debt. According to a CNBC report, 85% percent of student loan borrowers have said that it is difficult to buy a home. They also have low credit scores. Athena Tucker, a student at Ridgeview said,” it will affect how I will take out loans in the future”. If taxes go up, many people who are already having difficulties with buying a home will have to save more money to buy a home by then. Another difficulty with saving money to buy a house is the necessities people need. In the process of saving money, they will have to buy food, clothes, and somewhere to stay. If taxes do go up then it will take even longer than it already is to buy a home by then.