Democrats Are Pushing For Student Loan Forgiveness. Who Would It Benefit?

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Michael Ginsberg Congressional Correspondent
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Responding to calls from left-wing lawmakers, President Joe Biden extended the U.S. Treasury’s student loan collection moratorium through May 2022 on Wednesday.

Although Biden cited economic fallout from the COVID-19 pandemic for his decision to extend the pause, the furthest left members of the Democratic Party have argued that the president should order the Education Department to unilaterally cancel millions of dollars in federally-held student debt due to its impact on the working-class and minority groups. The Education Department may have the authority to take this action under various federal statutes, but its legality would likely be decided by federal courts.

Despite the protests of many prominent Democrats, studies have consistently shown that upper-middle class individuals and families, as well as holders of graduate degrees, hold most student debt. Of the more than $1.6 trillion in student debt held by Americans, roughly half is held by individuals who pursued graduate degrees, despite the fact that graduate degree holders constitute only one-quarter of borrowers. Only about 6% of borrowers owe more than $100,000 in debt, according to the Brookings Institute.

Further, 2020 graduates of private colleges took out roughly $5,500 more on average than 2020 graduates of public colleges, according to U.S. News and World Report. All graduates, however, are likely to earn more money over the course of their lifetimes than non-graduates, with the median bachelor’s degree holder earning more than $1.2 million more than the median high school graduate or GED holder. The median graduate degree holder earns $1.6 million more than the median high school graduate over a lifetime of work, according to a Georgetown University study.

Despite the economic data, the left-wing “Squad” has been the most vocal group of advocates for forgiving student loan debt. Massachusetts Rep. Ayanna Pressley claimed in April that being “anti-racist” required opposition to student loan collection, and later asserted that “student debt is policy violence.” (RELATED: ‘Flick His Pen And Sign It’: Democrats Push Biden To Cancel $50,000 In Student Loan Debt)

In a speech on the House floor, New York Rep. Alexandria Ocasio-Cortez claimed that “teenagers [are] signing up for hundreds of thousands of dollars of student debt,” while calling attention to her own student loans. She also decried a “false narrative that student loan debt is for the privileged,” calling it “a ridiculous assertion.”

During her 2020 presidential campaign, Massachusetts Sen. Elizabeth Warren promised to cancel all student debt held by households with incomes below $100,000 a year, and promised to cancel a “substantial” portion of debt held by households with incomes of up to $250,000 a year. The median American household has a yearly income of $67,000 a year.

In addition to being wealthier, college and graduate degree holders are more likely to support Democrats. 56% of college graduates supported Joe Biden in the 2020 presidential election, a Pew Research Center survey of validated voters found, while 67% of voters with post-graduate degrees supported Biden.