Biden’s transition team recently announced that the President-Elect plans to extend the student loan payment pause in addition to a request to Congress for $10,000 per-person of loan forgiveness.
University of Arkansas Economist David Sorto says that in the 4th quarter of 2020, there were $1.57 trillion in outstanding federal student loans.
Sorto says when you look at those who have student loans and their incomes, he’s not surprised the plan is to cut $10,000 across the board.
“Higher-income individuals and households hold the larger debt loads but also have much higher earnings,” he says. “I imagine the Biden admin is likely aware of this fact, and it may be the reason that they’re suggesting a $10,000 forgiveness so as not to benefit higher-earning individuals and households.”
Scott Hardin with the Arkansas Department of Finance adds that if any version of this plan were to be put into action, he expects there would be a noticeable effect in Arkansas.
“Anytime there is more money in the pockets of Arkansans, it’s going to affect the bottom line, Hardin says. “Whatever that payment is, it’s money being spent on main street and everywhere else.”
U of A student Anton Casillas says even though he has just started his college career this would be a huge weight off his soldiers, but he’s also thinking about the bigger picture.
“People just major in something that is going to pay well instead of what they really want to do, and that really hurts themselves and hurts the world too because people aren’t passionate about what they’re doing,” he says.