Biden-Harris administration faces looming decision on student loan debt
The Biden-Harris administration has, thus far, been light on its position on student loan debt, but according to reports released last week, they are nearing a decision on what steps to take next. The problem has been growing steadily over the years and has finally reached a tipping point, where the matter must be addressed by this administration or the next one. Here’s what’s known so far about their plans regarding student loan debt and why it’s so important that something is done soon.
Student Loans Are Crushing the American Dream
The average American owes more than $37,000 in student loans. Student loans are now the second highest form of personal indebtedness, after mortgages. This burden of debt is crushing the American dream for many. The Biden-Harris administration has been working to address the growing problem of student loan debt and has proposed legislation that would make public universities tuition-free for families earning less than $125,000 a year.
Student loans are a major factor in young Americans’ decisions about whether to take time off from work for their studies, where to go to college, and what career to pursue. Studies show that as many as 30% of recent graduates moved back in with their parents after college because they could not afford living expenses. And more than half of students have delayed saving for retirement or have had trouble paying off medical bills because of their loans.
This is one of several reasons why America’s birth rate has decreased dramatically since 2008. The trend is so extreme that some demographers are predicting an unprecedented decline in the American population by 2050. As an immediate measure, the Biden-Harris plan calls for providing universal access to comprehensive family planning services so women can better control their reproductive choices.
Student Loan Debt Is Bankrupting America
Student loan debt is an epidemic that is bankrupting America. There are 44 million Americans with outstanding loans and the average borrower owes $37,000. The amount of unpaid student loans exceeds the combined total of credit card and auto-loan debt and they are the second leading cause of bankruptcy in America today.
Unfortunately, those numbers don’t stop growing. More than half of all college graduates are going to leave school with a diploma and tens of thousands of dollars in debt. What’s more, about 70% percent of students who borrow for college will never pay off what they owe by starting their career with a six-figure salary, or $100,000 a year.
The Data is Horrific – But What Can We Do?
If you are a recent graduate, like I am, the idea of the Biden-Harris administration’s looming decision about student loan debt is more than a little terrifying. In 2010, 40 million Americans collectively owed $1.2 trillion in federal and private loans and it is projected that 42 million Americans will owe $1 billion in 2020.
The data is horrific but what can we do? Several times during his campaign, President Obama promised to cap out monthly payments to 10% of a borrower’s income, which would essentially make it easier for borrowers to afford their payments and pay off their loans faster. This plan would prevent students from taking out loans that they cannot afford in the first place.
Real Solutions Needed in Washington, DC.
The proposed solution has been to allow people with federal and private loans to refinance their debt, but this will only help a small number of borrowers in the end. There is talk about lowering the interest rates and postponing payments for those who can’t afford them, but these changes do not address the structural problems that have led to the skyrocketing amount of student loan debt.
The cost of college is too high, students are graduating with an average of $37,000 in debt, and companies are reluctant to hire those burdened with such high levels of loans. The Biden-Harris administration needs real solutions now more than ever if they want to avoid a crisis situation in higher education that could lead us down a path similar to what happened during the Great Recession.
Here’s How We Solve it.
The Biden-Harris Administration is faced with a difficult dilemma. Student loan debt has been steadily increasing for the past twenty years, with 44 million Americans owing over $1.4 trillion in student loans. This means that the average college graduate owes about $25,000 in loans this is more than twice what they would owe if they graduated from college 20 years ago. It is clear that something needs to be done, but what?
We need to fundamentally change the way we view and treat higher education in America. In order to reduce the amount of student loan debt people are left with after graduating from school, we should make attending a public university free for everyone, not just lower-income students, but everyone.
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