January 18, 2021

Joe Biden’s student loan proposal – KNWA

Joe Biden’s student loan proposal - KNWA
Joe Biden’s student loan proposal - KNWA

FAYETTEVILLE, Ark (KNWA/KFTA) – We are two days away from President-Elect, Joe Biden being sworn into office and one of his first anticipated actions has to do with student loan forgiveness.

Biden’s transition team recently announced that the President-Elect plans to extend the student loan payment pause in addition to a request to Congress for $10,000 per-person of loan forgiveness.

Local economist for the University of Arkansas, David Sorto, broke it down and he says that in the 4th quarter of 2020, there were $1.57 trillion in outstanding federal student loans.

Sorto tells me when you look at those who have student loans and their incomes he’s not surprised the plan is to cut $10,000 across the board.

Sorto says, “higher-income individuals and households hold the larger debt loads but also have much higher earnings. I imagine the Biden admin is likely aware of this fact and it may be the reason that they’re suggesting a $10,000 forgiveness so as not to benefit higher-earning individuals and households.”

Scott Hardin with the Arkansas Department of Finance adds that if any version of this plan were to be put into action he expects there would be a noticeable effect in Arkansas. 

“Anytime there is more money in the pockets of Arkansasans it’s going to affect the bottom line.” Says Hardin, “whatever that payment is, it’s money being spent on main street and everywhere else.”

One local student, I ran into at the U of A says even though he has just started his college career this would be a huge weight off his soldiers, but he’s also thinking about the bigger picture. 

Anton Casillas says, “people just major in something that is going to pay well instead of what they really want to do, and that really hurts themselves and hurts the world too because people aren’t passionate about what they’re doing.”