Presidet-Elect Joe Biden has proposed eliminating $10,000 in student loan debt for 37 million college graduates. If he is able to fulfill his promise, it would do a lot to improve the financial standing of many Black college graduates. A study from the Brookings Institution showed that the average Black college graduate has more than $52,000 in student loan debt upon graduation. In comparison, white college graduates have approximately $28,000 in student debt upon graduation. Adding on, Black graduates are twice as likely to accumulate student loan debt than their white counterparts. Despite the good Biden's plan could do for Black college graduates, financial experts believe that it would have trouble getting through Congress.
“To just wipe out student debt…that was one of the further left ideas that is not going to be feasible given that the Republicans really fought the Democrats to [a] draw in Congress," Thomas B. Fordham Institute President Thomas Petrilli said.
Those who are fighting to eliminate student loan debt for many Americans remain unfazed by the political obstacles. Lobbyists are currently pushing to have student loan removal included in a new stimulus package.
“We’re committed to fighting to ensure that student debt relief is included in any future stimulus deal,” Student Debt Crisis Executive Director Natalia Abrams said.
In addition to including student debt removal in a stimulus package, top Democrats are pushing for President-Elect Biden to approve the Higher Education Act. Through an executive order, his administration would “have the power and legal authority to order their Department of Education to cancel millions in student debts on day one of their administration."
“I have a proposal with Elizabeth Warren that the first $50,000 of debt be vanquished and we believe that Joe Biden can do that with the pen as opposed to legislation," Senate Minority Leader Chuck Schumer said.
Student loan debt has more than tripled since 2006 and it is showing no signs of slowing down. It is not uncommon for two generations within the same household to be dealing with student loan debt at the same time.
“I met people on the [campaign] trail who were in their 50s and 60s and still struggling with some of the $1.6 trillion in student loan debt," former presidential candidate Andrew Yang said.
Putting forth Biden's plan or the Higher Education Act could relive stress within many households. In fact, it could do the American economy a lot of good according to some experts.
“A partial or total student debt cancellation would increase households' disposable income by the amount of debt service saved,” a report Moody's Investors Service stated.
“Economic activity would in turn be boosted by the portion of these debt service savings channeled into other current and investment spending. At the same time, some households could potentially increase spending beyond their debt service savings if their improved net financial wealth entices them to save less and spend more overall, yielding even greater stimulus to the economy.”
Despite the positive prospects within the economy, skeptics still remain. The nation's $1.6 billion student loan bill leaves many believing that there is a long, arduous path to success that lies ahead.
"Cancellation won't necessarily happen overnight,” Center for Responsible Lending Director Ashley Harrington said.
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