Examining President Biden's student loan forgiveness program
A MARTINEZ, HOST:
President Biden announced a plan this week to offer up to $20,000 in student loan forgiveness for millions of borrowers.
GISELLE PARKS: Holy cow. Holy cow. OK. That's amazing. OK. Wow.
RACHEL MARTIN, HOST:
That's Giselle Parks of Orlando, Fla., when she heard the news. She expects to have her $5,000 in student loans completely erased. But many other borrowers are still going to have to pay loans off after Biden's changes.
MARTINEZ: NPR's Sequoia Carrillo is here to talk us through this.
Now, Sequoia, Biden's plan is giving money to households making up to 250,000. The Census Bureau says they're top 5% earners. So is this all really just helping well-off college grads that maybe don't need the help?
SEQUOIA CARRILLO, BYLINE: Not exactly. This plan is actually designed to mostly help low-income borrowers. The administration estimates that among borrowers who aren't in school anymore, about 90% of relief dollars will go to people earning less than $75,000 a year. And keep in mind that not all borrowers are graduates. According to the Education Department, a third of all student loan borrowers have some debt, but no degree. This plan would help those folks a lot. And then, of course, another big part of Biden's announcement is that Pell Grant recipients qualify for up to $20,000 in loan relief. And that's twice as much as other borrowers.
MARTINEZ: OK. So it sounds like they're the big winners here. But why is it fair to give them more help?
CARRILLO: Pell Grants are designed to help the lowest-income students afford college. According to the White House, more than 60% of current federal student loan borrowers are also Pell Grant recipients. And at one point, these grants covered almost the entire cost of college, but they haven't kept up with rising tuition. So you end up having the lowest-income students having to borrow more just to make it in the classroom. And that brings us to another core tenet of this plan, which is to help address racial inequalities around student loans. Black student loan borrowers tend to take out more loans to pay for college, and those debts tend to last longer compared to their white peers. They're also twice as likely to have received Pell Grants.
Member station reporter Alexis Marshall spoke to graduate student Hailee B. Roye in Nashville. Roye is a Pell Grant recipient, and she thinks she'll qualify for forgiveness, but she's expecting to over $100,000 after she graduates.
HAILEE B ROYE: It's, like, a bittersweet type of thing. Like, it's sweet - like, yeah, 20K, like, knocked off. You know, that may be, like, a year or two knocked off that I have to pay. But it's also like, now I still have 80 grand left, so how am I going to pay this back?
MARTINEZ: All right. So that brings up a kind of opposite beef over Biden's move that it did not go far enough. So what gives?
CARRILLO: We heard from other Black borrowers who still expect to owe a lot even after some of their debt is forgiven. And that's something the NAACP in particular is trying to draw attention to. In fact, the morning after Biden's announcement, they hosted a rally with a brass band outside the White House calling for even more debt relief. But many Democrats who'd been arguing for higher debt cancellation, like Elizabeth Warren and Ayanna Pressley, ended up applauding the move.
MARTINEZ: Now, lots of GOP lawmakers have been opposed to any level of forgiveness. What's been their argument against?
CARRILLO: Republicans have criticized the plan for being unfair to people who have already paid off their student loans. And they've also called it out because it does nothing to address the high cost of college. Florida Governor Ron DeSantis spoke about it this Thursday. He called Biden's plan, quote, "a policy disaster and a political disaster."
MARTINEZ: That's NPR's Sequoia Carrillo. Thanks a lot.
CARRILLO: Thank you. Transcript provided by NPR, Copyright NPR.