Politics & the Nation’s May 16 article “Biden dives into risky student debt policy” addressed student debt relief policy, including Sen. Bernie Sanders’ (I-Vt.) proposal to d $50,000 debt forgiveness, and opposition to such plans. President Biden has signaled support for some debt forgiveness, but not at the higher levels demanded by progressive Democrats. The article noted that 45 million Americans held a total of $1.6 trillion in federal student debt as of December 2021.
Although higher education is expensive, it is an investment by individuals to acquire knowledge and skills for personal and national growth. An Economist-YouGov poll found that 49% of Americans support canceling student loan debt, and other polls show majority support for some level of debt cancellation. The challenge is the level of relief and who benefits from it.
There is broad support for $10,000 loan forgiveness, which would wipe out the balances of about a third of borrowers. This is also the level at which the Secure Act of 2019 allowed students, who had 529 Plan student account balances, to use 529 funds to pay qualified student loans. Regardless of the 529 balance, only $10,000 can be applied to student loans.
There was bipartisan agreement in 2019 on the $10,000 level that could be applied to qualifying loans, and should form the basis of a deal on student debt cancellation of $10,000 now. It would provide the same benefit to students and their families who could not save and got federal loans for college as those who could save for college through 529 plans. It would be a fair solution for Mr. Biden to enact by executive order.