‘People are paying a lot of money’: What students say about Biden’s loan forgiveness plan

The Biden administration’s announced plan to forgive millions of Americans in student loan debt caused a stir this week, but what are students thinking?

ABC News hit the road from the University of North Carolina at Chapel Hill (UNC) to hear what students had to say about President Joe Biden’s announcement on student loan debt forgiveness.

Biden said Wednesday his administration would forgive tens of thousands of dollars for people earning less than $125,000 a year. UNC students offered different thoughts on the president’s latest move.

UNC student Elizabeth Johnson said she supports Biden forgiving student loans.

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Activists hold student debt cancellation signs as they gather to rally outside the White House, August 25, 2022.

Stefani Reynolds/AFP via Getty Images

“People are paying a lot of money, and the loans aren’t really changing, because the interest rates are so high and so this discount kind of helps offset some of that,” Johnson said.

People who have taken out Pell Grants to pay for their college education, which are grants given to low-income borrowers, can get debt forgiveness of up to $20,000 as part of the broader announcement of Wednesday on student loan forgiveness. Other student borrowers who don’t have Pell grants will still have loans forgiven up to $10,000, according to the White House.

Although some people support the White House’s action on student debt, some said higher education has become hard to afford and out of reach for many.

“Getting an education in this country shouldn’t be such a heavy financial burden on someone, it shouldn’t even be a problem,” said UNC sophomore Jasmine Bright.

President Joe Biden speaks about canceling student loan debt in the Roosevelt Room of the White House, August 24, 2022.

Evan Vucci/AP

According to the Education Data Initiative, black graduates have $25,000 more debt than their white counterparts. Biden’s loan forgiveness plan will benefit the black community and provide more opportunities to achieve certain financial goals, according to the plan.

“Because of the way this announcement has unfolded, it would allow many Americans, especially African Americans now, to seize the opportunity for homeownership and homeownership due to the rate of current indebtedness,” said Derrick Johnson, CEO and President of the NAACP. , told ABC News.

Yet the cost of loan forgiveness is high. On Friday, the White House said Biden’s loan forgiveness plan would cost about $24 billion a year over the next 10 years, or a total of $240 billion, but others believe it could end up costing more.

Kent Smetters, a professor at the Wharton School at the University of Pennsylvania and director of the budget model at Penn Wharton, told ABC News that Biden’s plan could cost more than $1 trillion.

“There are no specific revenues dedicated to the additional costs associated with his plan,” Smetters said. And so it will only add to the national debt. And the national debt is already almost the size of the economy, so it will grow even more.”

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