How President Biden’s student loan forgiveness plan affects Americans
In certain situations, the plan will cancel up to $20,000 in federal student loan debts for past and present students.
The cost of a college education has skyrocketed during the last fifty years. As a result, student borrowing has gradually increased — making it harder for young adults to establish themselves after finishing their education.
President Joe Biden announced a plan this week to cancel $10,000 in federal student loan debts for Americans making less than $125,000 annually. That could be as much as $20,000 for those who received Pell Grants.
But this plan doesn’t come without blowback — both from conservatives and liberals. Some say it will lead to more inflation, while others say it doesn’t address the problem of colleges and still more people think this plan is unfair.
“$125,000 is not the same for a Black person and a white person on average.” — Andre Perry
Listen: What Biden’s plan does, and doesn’t do, to help students pay off debt in America.
Andre Perry is a Senior Fellow at Brookings Metro and a scholar-in-residence at American University. He has been writing about the issue of college student debt and Biden’s recent plan.
Perry says while the debt cancelation plan is good, it doesn’t do enough to create an equitable playing field for people of color.
“$125,000 is not the same for a Black person and a white person on average,” says Perry. “On average, white people can expect an intergenerational wealth transfer when they graduate. On average, Black graduates, are expected to contribute to their family’s wealth. So, you see the differences in wealth playing out and how loans are taken.”
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