Students lament Biden refusal to cancel $50,000 in student debt

President Joe Biden has essentially ruled out canceling $50,000 in student debt per person — disappointing some student borrowers who were counting on that help.

"I didn't have my hopes up," said Joshira Maduro, 30.

The research analyst graduated from Lehigh University in 2012 with a bachelor's degree in finance and marketing and a student loan tab of $132,000. She has been on a strict budget in order to afford her monthly payments ever since.

The payment pause on federal student debt during the coronavirus pandemic has offered Maduro, who lives in Charlotte, North Carolina, a rare opportunity to chip away at the balance of her highest-interest loans and even start building an emergency savings fund.

Meanwhile, the president's proposal to forgive up to $10,000 in student debt per borrower, which is still on the table, would go a long way toward achieving even greater financial milestones, Maduro said, such as buying a car or saving for the down payment on a house.

"That's essentially a whole year of payments that would be taken care of," she said. "Even just having a whole year of that money saved — I'll know that if anything happens, I'll feel confident I can bounce back."

$10,000 would just scratch the surface for many

For others, $10,000 would be only a drop in the bucket. Kimberly Chatterjee, 29, took out about $200,000 in loans to attend New York University and graduated in 2014 with degrees in English and acting.

Up until the pandemic, the New York resident had worked full time as an actor and paid off about $50,000 in debt. Even now, though she's on unemployment and her payments are paused due to Covid, she's trying to put any extra money towards savings and paying down her student loan debt.

Chatterjee pushed back against President Biden's argument that he shouldn't forgive $50,000 in debt for people who went to elite schools.

"This idea that only the rich people go to the fancy schools is absolutely untrue," she said, adding that her degree also opened many doors for her in the performing arts. "In terms of my career and the work I've been able to do, it was absolutely worth it for me and a decision I wouldn't change."

What would it mean to have $50,000 of her total debt cancelled? "It would be life-changing," she said.

How far $50,000 in loan forgiveness would go

To be sure, many argue that canceling student loan debt is unfair to those who have paid off their loans or made different decisions about higher education.

"There's a fairness issue," said Scott MacDonald, author of "Education without Debt." "So many people have worked so hard to pay down debt — people that didn't go to the college they wanted to because they couldn't afford it or didn't take vacations for years."

But others argue that cancelling a portion of the total $1.6 trillion in outstanding student loan debt would benefit the economy and many Americans from all walks of life.

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If all federal student loan borrowers got $10,000 of their debt forgiven, roughly one-third of federal student loan borrowers, or 14.4 million people, would see their balances reset to zero, according to higher education expert Mark Kantrowitz. If $50,000 of education debt was forgiven, it would wipe away all debt for 80% of borrowers, or roughly 36 million people, according to Kantrowitz.

Studies also show low-income borrowers, women and people of color are struggling the most with student loans — a pattern that only worsened during the pandemic.

And, those who are calling for $50,000 in student loan debt forgiveness say that a lower amount wouldn't go as far to help close the racial wealth gap experienced by Black and Brown Americans, who hold more education debt than their White counterparts.

When Demetrius Amparan, 30, got into Valparaiso University, he jumped at the chance to go to the school as a first-generation college student from Chicago's South Side. His parents couldn't help him pay for school, so he signed up for any loans the college offered him.

"For Black and Brown people like myself, [higher education] is like the most prized thing we can attain," said Amparan, who still lives in the Windy City. He graduated in 2012 with degrees in communication, public relations and sociology.

Now, Amparan, the Donor Relations Manager at Young Chicago Authors, owes more than $96,000 in student loan debt. As a nonprofit worker, he's never been able to consistently make the high monthly payments on his outstanding loans, especially because he has two young daughters, ages 7 and 10, whom he cares for.

He found Biden's argument against forgiving $50,000 in debt misguided, he said, especially because he knows how much that kind of relief would help his community.

"It struck me pretty hard when I heard it," said Amparan.

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