Borrowers with student loan debt got hopeful news earlier this week when President Joe Biden announced he is considering cancelling student loans.
“I am in the process of taking a hard look at whether or not there will be additional debt forgiveness” the president said during a news conference.
The announcement comes as the Education Department announced it cancelled around $6.8 billion in student debt for more than 110,000 borrowers who work in public service.
Horacio Mendez of the Woodstock Institute says the government should focus on borrowers who need the most help. “There is an ability to repay factor that needs to go into this. The ideal, both from an economical and taxpayer perspective is to be able to underwrite the decision of debt forgiveness based upon the individual circumstance.”
Michael Petrilli of the Thomas B. Fordham Institute says forgiving all student loans would mainly benefit America’s most advantaged individuals.
According to education data from the Urban Institute, households with the highest income brackets owe the majority of the $1.73 trillion of student debt.
Petrilli said that targeted loan forgiveness makes sense “for people who were taken advantage of, especially by shady for-profit colleges, for people who go into low paying public service jobs, including teaching. But not for a new college graduate heading off to Wall Street and making six figures.”