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Low and middle income persons
According to a White House analysis, 87% of the dollars forgiven under his plan would go to those making less than $75,000 a year.
Meanwhile, any individuals earning more than $125,000 will be excluded from lump sum relief.
Those who stand to receive the most debt cancellation under the president’s plan — $20,0000 — received Pell Grants for college, meaning they also come from low-income families. Higher education expert Mark Kantrowitz says most grant recipients come from families with incomes below $60,000.
“This plan really helps low-income people across the board,” Andre Perry, senior fellow at Brookings Metro, said in a recent interview on The Current, a Brookings Institution podcast.
people of color
The student debt crisis is cited as a major factor in the widening racial wealth gap in the US today. According to the Federal Reserve Bank of St. Louis, in the second quarter of 2022, black households own 25 cents for every dollar of white household wealth.
A Brookings Institution report found that black college graduates owe an average of $7,400 more than their white peers. And that disparity worsens over time: Black college students owe more than $52,000 four years after graduation, compared with about $28,000 for the average white college graduate.
Wisdom Cole, national director of the NAACP’s youth and college division, recently told Politico that if student loan forgiveness doesn’t come to fruition, it would be “an atrocity for borrowers across the nation and would hit black borrowers even harder. Level.”
Women were widely recognized as the biggest winners of Biden’s student loan forgiveness plan, as they owe two-thirds of the nation’s outstanding student debt.
Research from the Education Data Initiative found that the average debt of female student borrowers one year after graduation is nearly 10% higher than that of their male peers and that, due to the gender wage gap, women take two years longer to pay off than men. average off their student loans.
“Women will be hit the hardest if loan forgiveness fails,” Kantrowitz said.
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In recent years, more people continue to take out loans into their 50s, 60s and beyond, due to the fact that more people are returning to school later in life and student debt has become more burdensome and therefore harder to pay off.
In 1989, only 3% of households headed by individuals age 50 and older carried student loan debt, and their average balance was about $10,000, according to AARP. As of 2016, nearly 10% of these older households still owe on student loans, and their typical balances exceed $33,000.
As a result, the student debt problem for older Americans is likely to get worse without cancellation, experts say.