Student loan forgiveness gives borrowers some financial breathing room
MARY LOUISE KELLY, HOST:
Reaction continues to pour in following the news that the Biden administration will forgive up to $10,000 of federal student loans per borrower. And that amount goes up to 20,000 for lower-income Pell Grant recipients. It is a complicated and controversial topic. Some say the amounts aren't enough. Others say loan forgiveness should not happen at all. But for those with outstanding debt...
SEAN MANNING: The president's announcement is bringing me incredible peace of mind right now.
KELLY: That is Sean Manning here in Washington, D.C. The forgiveness plan cuts his loan balance in half.
MANNING: I didn't believe I was going to be able to pay off these loans anytime in the near future. But now the situation at least feels manageable. Like, at some point, I could afford to do something crazy, like put a down payment on a house before I turned 40.
ARI SHAPIRO, HOST:
Meanwhile, Carol Oldham in Boston says half of both her and her husband's loans will be forgiven.
CAROL OLDHAM: Which makes a huge difference in the amount that we're paying each month, right? It's the difference between we have to be really careful about how we spend money and the rest of our lives and being able to have a little bit more freedom to put money back into the economy.
SHAPIRO: She says now they're looking at buying a newer used car, since their current one has been a struggle to keep running. But as grateful as she is, she wants to see the government address the root causes of the student debt crisis. And she takes particular issue with those who see the student loan forgiveness as a gift to the wealthy.
OLDHAM: If you're wealthy, you don't have to take out loans to start with. And so generally speaking, the folks with a lot of loans tend to be people who are not from the most advantaged part of society.
SHAPIRO: And as for the idea that this isn't fair to those who've already paid off their loans...
KELLY: Well, Dylan Roth is one of them. In fact, he made his final payment on Tuesday right before the announcement.
DYLAN ROTH: And I felt very, very silly.
KELLY: Luckily, under the new forgiveness plan, Roth can apply for a refund for payments made since March 2020. Even without that benefit, Roth says he's happy for anyone who gets their debt erased.
ROTH: I don't want other people's lives being harder out of spite for myself.
KELLY: Roth says he did feel some temporary rage at having given away a few month's rent right before this was enacted. But...
ROTH: But I think it's silly to be angry about debt forgiveness. If you don't ever want conditions to get easier for the people who come after you, then nothing will ever get better.
SHAPIRO: That's Dylan Roth in Brooklyn, Carol Oldham in Boston and Sean Manning in Washington, D.C. Transcript provided by NPR, Copyright NPR.