The cumulative federal student loan debt has surpassed $1.54 trillion, according to the latest data from the Department of Education. That’s more than double what the balance was in 2010. Even adjusting for inflation, it is a 72% increase in the cumulative student loan balance.
Over the past several years, the rising student loan balance has stirred a conversation about college affordability, but that conversation has mostly focused on eliminating tuition for students going forward. During the 2020 Democratic presidential primary, the conversation expanded to include ideas to cancel or forgive all or a portion of student loan debt.
Senators Elizabeth Warren and Bernie Sanders introduced broad student debt cancellation plans in their respective campaigns that excited many student borrowers. Warren called for eliminating up to $50,000 in student debt based on the income of a student borrower and Sanders called for a one-time cancellation of all federal student debt. (His plan did not address debt that would be incurred afterwards for living costs or graduate school.)
After her exit from the presidential race, Senator Warren led many Democrats in calling for a minimum of $10,000 in student loan cancellation as part of a coronavirus relief and stimulus package. While initially not on board with broad student debt forgiveness, former Vice President Joe Biden has now backed Senator Warren’s $10,000 debt cancellation plan since becoming the Democratic nominee. He’s called for providing that cancellation to every borrower for coronavirus relief.
In that vein, Biden has called for cancelling the debt student borrowers took on to pay for undergraduate tuition at a public college or university. Borrowers must be earning less than $125,000 to be eligible. While that would likely be difficult to implement, it would eliminate a significant amount of student debt.
Of the two plans, Biden has emphasized the $10,000 cancellation more often. Given its universality and simplicity for implementation, it might be the more likely of plans to pass – not to mention its significantly cheaper price tag.
Biden has also called for fixing the Public Service Loan Forgiveness program, a call he made early in the primary. He said he would adopt a plan from Senators Kirsten Gillibrand and Tim Kaine for existing borrowers and overhaul the plan going forward since borrowers should have less in debt from his free college proposal.