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Student loan forgiveness is completely unfair to these student loan borrowers.

Here’s what you need to know — and what it means for your student loans.

Student Loans

Student loan forgiveness will have clear winners and losers. If President Joe Biden proceeds with wide-scale student loan cancellation, the most likely beneficiaries could include federal student loan borrowers who earn up to $150,000 annually. The White House says the president hasn’t made a final decision on whether to cancel student loans, so this framework could change. That said, if there is student loan forgiveness, here’s who could be excluded. Simply put, student loan forgiveness will be completely unfair to these people.

1. People who don’t have student loans

If you don’t have student loans, you may be wondering why the federal government would be spending money to subsidize student loan borrowers. Without student loan debt, student loan forgiveness may make little sense. You may have a mortgage and be wondering, “Will the government pay my mortgage?” For this group of Americans, you also may be questioning whether wide-scale student loan cancellation is the best use of government money — particularly with the prospect of a recession. Advocates of broad student loan forgiveness argue that this policy will stimulate the economy, increase home purchases and lead to new business formation.

2. People who never went to college

If you never went to college, you may be asking why you’re subsidizing Americans who were fortunate enough to attend college. For many, wide-scale student loan forgiveness not only feels like wealth distribution but also feels like a slap in the face to working Americans who also have financial struggles. For others, they understand targeted student loan forgiveness, including student loan cancellation in exchange for working in public service. (Biden has canceled more than $17 billion of student loans using targeted student loan forgiveness). The latest student loan debt statistics show that 45 million student loan borrowers collectively owe $1.7 trillion of student loan debt. Since there are approximately 250 million adult Americans, this means that roughly 80% of borrowers don’t have student loans or never had student loans. Some Americans who didn’t attend college simply couldn’t afford to do so. Therefore, they view broad student loan forgiveness as a gift to wealthier Americans.

3. People who paid off their student loans

If you paid off your student loans, it must be overwhelmingly frustrating to learn that student loan debt could be canceled. It’s akin to buying a Christmas present only to learn later that you could have got that same present at a huge discount. However, there are no returns, store credit or price matching. For those Americans who paid off student loans, many struggled financially too. They worked three jobs, sacrificed saving for retirement, didn’t buy a home and skipped vacations. They honored their financial commitments — even if they couldn’t “afford” to do so. Now, these Americans are wondering if they will get any refund, credit or compensation. The short answer: neither the president nor members of Congress have expressed any indication that previous student loan borrowers will be compensated. So, even if you paid off student loans last week, and Biden announces student loan forgiveness next week, you’re out of luck.

4. People who chose community college

Some Americans chose community college over more expensive public or private colleges and universities. Like many student loan borrowers, these community college students and graduates are struggling financially. While the latter group may not have significant student loan debt, they too would like financial relief. Had they known about the possibility of wide-scale student loan forgiveness, they might have chosen to attend a four-year college or university.

5. People with private student debt

If you have private student debt, you likely won’t qualify for Biden’s student loan forgiveness. Why? Student loan forgiveness will likely be limited to federal student loan debt owned by the U.S. Department of Education. This includes Direct Loans, for example, but won’t include most FFELP or Perkins Loans. Student loan borrowers with private student debt also haven’t been able to access Covid-19 temporary student loan relief, including the student loan payment pause. They also can’t access income-driven repayment plans through the federal government.


6. People with significant student loan debt

If you have significant student loan debt, wide-scale student loan forgiveness could have minimal impact on your student loan balance. Biden has supported $10,000 of student loan forgiveness for student loan borrowers. Plus, the president has said he’s not considering a plan to forgive $50,000 of student loan debt. If you have a relatively low student loan balance, $10,000 of student loan forgiveness could eliminate most or all of your student loans. However, if you have $100,000 of student loan debt, then $10,000 of student loan forgiveness would have less impact. If these student loan borrowers are struggling financially, the best they can hope for could include a fresh start on their student loans.

7. Future student loan borrowers

Wide-scale student loan forgiveness could be unfair to future student loan borrowers. Why? First, Biden’s student loan forgiveness likely will be one-time student loan cancellation. Simply put, if you have student loan debt on the day student loans are canceled, you’re in luck. If you borrow student loans the day after, you’re excluded from student loan forgiveness. Second, future student loan borrowers who expect but won’t get student loan forgiveness are also at risk. These student loan borrowers may borrow more student loan debt and then hope future policymakers will cancel student debt. However, if there is any broad student loan forgiveness, there’s no guarantee there will be any future student loan cancellation.

Unfairness is a term that’s thrown around often in education, public policy and politics. Advocates also say student loans are unfair, trap young people, create disparities, limit financial freedom and are prohibitively expensive. After years of inaction, supporters say wide-scale student loan forgiveness is the single most important policy initiative that Biden can implement at this moment in history. No matter where you stand on student loan forgiveness, it’s imperative to know that temporary student loan relief will end on August 31, 2022. You should be prepared to restart student loan payments. Here are some helpful ways to save money and pay off student loans faster:

Student Loans: Related Reading

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How to qualify for $17 billion of student loan forgiveness

Bill Maher: Student loan forgiveness is a “loser” issue


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