The New York Times says canceling student loans for everyone is a ‘bad idea’
the New York Times The editorial board says canceling student loans for everyone is a “bad idea”.
Here’s what you need to know — and what it means for your student loans.
In a blow to proponents of large-scale student loan cancellation, the New York Times editorial board officially opposes student loan forgiveness for all borrowers. Among the highlights of the new editorial:
- Burden of student loan debt is ‘crushing’ and has caused ‘lasting generational damage to the lives of millions of Americans’;
- However, if President Joe Biden were to enact large-scale student loan forgiveness through an executive order, it would be “legally questionable, economically unsound, politically unstable, and educationally problematic”;
- Rather than canceling student loans for everyone, the Biden administration should make higher education more affordable and help student borrowers who are most financially vulnerable;
- Canceling student loans for all borrowers sets a “bad precedent” and ignores the fact that future student borrowers will also borrow student loans;
- If Biden Cancels Student Loans Through Executive Order, It Could Be ‘Dragged in Court for Years’;
- If Biden offers student loan cancellation that Americans don’t see as fair, it could backfire on Democrats in the midterm elections; and
- Income limits for student loan forgiveness are ‘crucial’; otherwise, student loan forgiveness disproportionately benefits high-income earners. (Student loan forgiveness: here are the potential income limits to qualify).
Biden could cancel student loans, but with limits
Biden eyes large-scale student loan forgiveness; however, it’s starting to sound more focused. Biden could cancel student loans in at least 3 ways. That said, Biden may impose some restrictions on who is eligible for student loan forgiveness. For example, Biden could:
Another question that has been overlooked: what happens to temporary student loan relief? Currently, the student loan payment pause ends August 31, 2022. However, if Biden cancels student loans before that date, student loan forgiveness could mean the end of student loan relief. The argument goes: if student loans are forgiven, especially for financially vulnerable student borrowers, there is less need to extend the student loan payment break again.
Student Loan Forgiveness: Alternatives
Proponents of large-scale student loan forgiveness note that relief is key to stimulating the economy, reducing disparities and helping borrowers become debt-free so they can marry, start families and to buy a house. If Biden decides not to cancel student loans, however, he can take other proactive steps to help student borrowers. First, Biden could work with Congress to change bankruptcy laws to make it easier for student borrowers to get a fresh start on their student loans. Second, Biden, who has forgiven more than $17 billion in student loans, could rearrange repayment plans based on income. (Student Loan Forgiveness: 5 Key Takeaways from a Major Announcement). It could automatically enroll student borrowers, shorten the repayment period, and grant student loan forgiveness sooner. Third, Biden can fix the public service loan forgiveness so that more borrowers are eligible for the student loan forgiveness in exchange for public service.
Biden could announce a decision in a few weeks, but student borrowers should also have a game plan for student loan repayment. You may not qualify for student loan forgiveness, or if you do, all of your student loans may not be forgiven. Here are some popular ways to pay off student loans faster: