The debate over canceling student debt has many facets.
For example, let’s say there is a young adult who is a senior in high school in a typical middle-class family. After completing the FASA, the student realizes that his family makes “too much” for grants despite knowing they are on a strict budget. With the rising cost of everything from insurance to groceries, his parents tell him their debt-to-income ratio is too high to afford to help him with college.
He applies for multiple scholarships but doesn’t qualify for multiple reasons, such as his average academics, race, gender, and parent’s reported income. The scholarships he does get are one-time payments of $1,000 or less.
So, loans are his primary option.
The student is frustrated and realizes that he must go to a university that is not on his “want” list for financial reasons, despite seeing his friends getting into the college of their choice on scholarships.
The student knows his parents cannot afford to pay loan payments, so he gets a job while in college, hoping to avoid having a big debt at the end of four years.
Four years pass, and the student realizes that making minimum loan payments is the best he can do while trying to land a new job and a place to live. Even that won’t be easy. Just thinking about how long it will take to pay off his student loans makes him wonder if getting the degree was a poor financial move.
He denies himself a new car, sticking with the clunker he had in college. Homeownership is out of the question, and rent is too high, so he lives with his parents, and his friends often remind him of how this dampens his dating prospects. He also works two jobs. Many years later, his debt is paid in full.
He lives paycheck to paycheck and has no savings, but BRAVO!
Now, the not-so-young man hears Biden has canceled student debt for nearly 5 million Americans and growing.
Wait… WHAT?
The not-so-young man thinks of how his life may have been different if he had gotten this perk.
Is this fair?
Is the Biden administration’s regard for student debt relief fair and equitable, or does it allow individuals to avoid taking responsibility for their debts?
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Fox Business has reported that the Biden administration has announced a significant move towards a substantial new cycle of providing student loan handouts.
Read more about the handout plan from Fox:
President Biden says his administration is taking “another major step” in student debt handouts as the Department of Education will start emailing tens of millions of Americans informing them of potential options heading their way around the time of the presidential election.
The Department of Education says “all borrowers with at least one outstanding federally held student loan” should expect a message in their inbox notifying them that “they have until August 30 to call their servicer and opt out if they do not want this relief” — the rules of which are expected to be finalized by the department this fall.