Attempted Student Loan Forgiveness in US Raises Mixed Feelings

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Katelyn Umholtz still owes nearly $25,000 in college debt. Umholtz said when she first heard the news that President Joe Biden was ordering the partial forgiveness of student loan debt like hers, she immediately texted her family to celebrate.

“It’s a big and exciting deal for us,” Umholtz told VOA. “My sister has a bunch of student debt, too. We came from a low-income family and our dad told us taking out loans was the only way we could go to college.”

According to U.S. government data, Americans owe a combined total of $1.6 trillion in college debt, nearly equivalent to the size of the entire economy of Australia or Brazil.

In August, President Biden gave hope to tens of millions of these borrowers. He announced that the government would forgive $10,000 of federal student loan debt for any American who earns less than $125,000 per year. Loan recipients who received a Pell Grant — typically for lower-income students who demonstrate a financial need — would have an additional $10,000 forgiven in the president’s plan.

Excitement reached a fever pitch last week as the program’s online application went live. Already more than 22 million individuals have signed up via the digital form.

To borrowers like Umholtz, there is a hope partial student debt forgiveness can provide essential relief as crippling cost of living increases and record-level inflation hinder Americans still trying to recover from the economic ramifications of the coronavirus pandemic.

“I’ve never missed a student loan payment,” Umholtz said, “but the payments are high and so are rent, health insurance and other life costs. I’ve taken on medical debt, and I’ve taken on credit card debt. I’m hoping student loan forgiveness can give me space to pay these things off, and then — maybe one day — to think about having a family or buying a home. I haven’t been able to save for any of that yet.”

Despite the progress Biden’s plan has made toward becoming a reality, student loan forgiveness is not yet guaranteed. Six conservative-leaning states filed a lawsuit arguing that the president’s program would hurt companies managing federal loans.

On Friday, a federal appeals court temporarily blocked any debt from being erased until it deliberates on whether canceling student loan debt is within the president’s authority.

In fact, for all the Americans celebrating Biden’s push, many others deride it as an example of unnecessary spending during a period of rising national debt and economic turmoil.

“I think this could all potentially be a publicity stunt to help the president’s Democratic Party during the midterm elections in a few weeks,” said Angelica Garcia, a Republican voter from Saginaw County, Michigan. “If we want to help the economy, this is not the way to do it. It’s wasteful spending and it will have dire consequences for our country’s future.”