Will Student Loan Forgiveness Actually Work?

Yes, but no. It depends on the definition of “success”.

(Image credit: Worqiq)

There has been a lot of hand wringing over student loans ever since outstanding balance crossed the $1 trillion mark in 2013. The idea of blanket student loan forgiveness kicked in not soon after and went into overdrive during the 2020 general election.

Joe Biden dashed the hopes of many when he won the Democratic primary, essentially killing the plan put forth Bernie Sanders to forgive all federal student loan debt. Biden promised to forgive $10,000, with plans to work with Congress on a much higher forgiveness level his first year in office.

Currently, that plan is being tweaked, as the Biden administration recently asked the Secretary of Education, Miguel Cardona, to research the legality of forgiving up to $50,000 in federal student loans via executive action alone. Looking into this option was instigated by the following:

• The tumultuous relationship between both major parties, combined with a razor-thin Democratic majority in the Senate
• Growing pressure from the Democratic party to “do more” than $10,000
• A political strategy for big wins in the first year to gain momentum heading into the midterms in 2022