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Phyllis Wintter has had a student debt for over 30 years. At the age of 67, she still owes about $ 48,000.
Now she hopes things will change and that President Joe Biden will forgive her loans.
“It would be great if we could die free of this debt,” said Wintter, who lives in Georgia.
But, she added, “$ 10,000 wouldn’t do it. I would still have $ 38,000, and I can’t afford that.”
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The likelihood of student debt cancellation becoming a reality has never been greater. President Joe Biden said on the campaign trail that he is in favor of canceling $ 10,000 per borrower, and now he has asked his education secretary to draft a report on his legal authority to wipe out as much as $ 50,000 for everyone.
But even among those who support the cancellation of the education debt, there are disagreements, particularly about how big the relief should be and who should get it. For example, some have put forward the idea of forgiving the loans of essential workers or just low-income Americans.
Higher education expert Mark Kantrowitz recently compiled a report comparing some of these different forgiveness plans and their potential consequences.
Below are some of them.
Forgiveness based on age?
A growing number of Americans provide student loans into old age. And many of them cannot afford the payments.
According to a report by the Government Accountability Office, one-third of student loan borrowers over the age of 65 are in default, and half of those over 75 have fallen behind.
Although Wintter has avoided default, she said her student loans have made it impossible for her to qualify for a mortgage. She recently tried again but was denied.
Phyllis Wintter
Source: Phyllis Wintter
She currently lives with her daughter for financial reasons, but longs to have her own home, especially at this point in her life.
“It would mean I could be with myself for a while,” said Wintter.
According to Kantrowitz, canceling student loans for over-65s would cost the government about $ 59 billion and affect 2 million people.
The move would not be unprecedented. For example, the Swedish government forgives loans from all borrowers over the age of 68, and the UK used to have a similar policy.
By profession?
Others have suggested scrapping loans from people in certain professions where contributions to society are high, as well as indebtedness.
For example, Kantrowitz found that canceling social workers’ student loans would cost the government about $ 18 billion and provide assistance to about 400,000 people.
The government would have to pay about $ 117 billion to cancel teacher debt, leaving about 3 million people debt-free.
The idea of canceling the educational debt of doctors and nurses also gained popularity during the pandemic. This would cost about $ 250 billion and likely affect about 1 million individuals.
On income?
Some experts say any student debt forgiveness should target low-income Americans, noting that many with education debt have high salaries.
About two-thirds of student loan borrowers in the US earn less than $ 100,000 per year. According to Kantrowitz’s analysis, it would cost the government about $ 938 billion to wipe out the loans from anyone below that threshold.
One-third of borrowers earn less than $ 50,000, and it would cost about $ 437 billion just to forgive these people’s loans.
$ 10,000 or $ 50,000?
Right now, the main point of contention among advocates of student loan cancellations is about how much debt to cut.
If all borrowers on a federal student loan were to forgive $ 10,000 of their debt, the outstanding education debt in the country would drop to about $ 1.3 trillion, from $ 1.7 trillion, according to Kantrowitz.
And about a third of federal student loan borrowers, or 15 million people, would see their balances go to zero.
On the other hand, scrapping $ 50,000 for all borrowers would reduce outstanding student loan debt to $ 700 billion, from $ 1.7 trillion. Meanwhile, the debt of 80% of federal student loan borrowers, or 36 million people, is said to be completely gone.
Even under that more generous plan, not everyone would be happy.
One-fifth of federal student loan borrowers owe more than $ 50,000, and about 7% of borrowers owe more than six figures.