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Phyllis Wintter has had student debt for over 30 years. At 67, she still owes about $ 48,000.
Now she hopes that change can come, and that President Joe Biden will forgive her loans.
“It would be great if we could die free of this debt,” said Wintter, who lives in Georgia.
But, she added, “$ 10,000 would not do that. I would still have $ 38,000, and I can not afford it.”
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The chances of the student debt waiver becoming a reality have never been greater. President Joe Biden said at the campaign that he supported $ 10,000 per borrower, and now he has asked his education secretary to draft a report on his legal authority to wipe out as much as $ 50,000 for everyone.
Even among those who support the cancellation of education debt, there are differences of opinion, especially about how big the relief should be and who should get it. Some, for example, have the idea of forgiving the loans of essential workers or only low-income Americans.
Mark Kantrowitz, an expert in higher education, recently compiled a report comparing some of these different forgiveness plans and their potential consequences.
Below are some of them.
Forgiveness by age?
A growing number of Americans are bringing in student loans in their old age. And many of them can not afford the payments.
According to a report from the Government Offices, a third of the borrowers over the age of 65 have failed and half of the over 75 have fallen behind.
Although Wintter avoided default, she said her student loans made it impossible for her to qualify for a mortgage. She recently tried again but was refused.
Phyllis Wintter
Source: Phyllis Wintter
For financial reasons, she currently lives with her daughter, but would like to have her own home, especially at this stage of her life.
“It would mean I could be by myself for a while,” Wintter said.
The cancellation of student loans for people over 65 will cost the government about $ 59 billion and affect 2 million people, according to Kantrowitz.
The move would not be unprecedented. For example, the Swedish government forgives the loans of all borrowers older than 68 years, and the United Kingdom had a similar policy in the past.
By profession?
Others have suggested that the loans of people in certain professions, where the contribution to society is high, as well as the debt burden, be wiped out.
Kantrowitz, for example, found that canceling social worker student loans would cost the government about $ 18 billion and provide relief to about 400,000 people.
The government would have to shell out about $ 117 billion to forgive the debt of teachers, leaving about 3 million people debt-free.
The idea of forgiving the teaching debt of doctors and nurses also became popular during the pandemic. It would cost about $ 250 billion and probably affect about 1 million individuals.
According to income?
Some experts believe that any waiver of student debt should be aimed at low-income Americans, and point out that many people with an education debt have high salaries.
About two-thirds of U.S. student loan borrowers earn less than $ 100,000 a year. It will cost the government about $ 938 billion to wipe out the loans for everyone below the threshold, according to Kantrowitz’s analysis.
A third of the borrowers earn less than $ 50,000, and it would cost about $ 437 billion just to forgive these people’s loans.
$ 10,000 or $ 50,000?
At the moment, the main dispute between proponents of forgiveness for student loans is over how much debt should be scrapped.
If all federal student loan borrowers were forgiven $ 10,000 of their debt, the outstanding education debt in the country would fall to about $ 1.3 billion, from $ 1.7 billion, according to Kantrowitz.
And about a third of the borrowers of federal student loans, or 15 million people, would see their balance set at zero.
The $ 50,000 cancellation for all borrowers, on the other hand, will shrink the country’s outstanding balance on student loans to $ 700 billion, from $ 1.7 billion. Meanwhile, the debt for 80% of federal lenders for student loans, or 36 million people, will disappear completely.
Even according to this broader plan, not everyone would be happy.
One-fifth of federal borrowers owe more than $ 50,000, and about 7% of borrowers owe more than six figures.