A ‘Drop in the Bucket’ for Many: Let’s Put Biden’s Student Loan Relief in Perspective

President Joe Biden on Wednesday announced that his administration will forgive $10,000 of federal student debt for borrowers who make less than $125,000 per year (and $20,000 for those who received Pell Grants), sort of fulfilling a key promise the president made on the 2020 campaign trail. He also announced an extension to the freeze on federal student loan payments.

The news was expected, and the lead-up to it came with mixed reactions. There are the usual critics—often right-wingers or people who attended college when it cost “$10 and a handy”—who say student debt cancellation is unfair to those who’ve already paid off their loans. Others are borrowers who say the move may be a step forward but isn’t enough, even for individuals who make what’s considered “good” money, perhaps around or above the $125,000 cap. That runs counter to the popular narrative that most professionals—particularly those with law or medical degrees—who graduated with student debt don’t need forgiveness, because they supposedly make more than enough to pay off their loans.

Currently, about 45 million people in the U.S. owe a combined $1.7 trillion in student loans, and research has shown Black women in particular are the most impacted by student debt. People who took out money to pay for college and graduate school work in varied fields with varied incomes, but even those who are able to live relatively comfortably say their debt continues to shape nearly every aspect of their lives. Some, like William Mees, weren’t even able to complete advanced degrees for which they accumulated significant debt: Mees told Jezebel he dropped out of pharmacy school after 1.5 years but over the course of that period took out “more than $100,000 in student debt.” He’s not alone: Between 2011 and 2017, 38.6 percent of people who took out student loans didn’t complete their education in that time period.

Meanwhile, the economy isn’t doing great. The U.S. inflation rate reached a 40-year peak back in June at 9.1%. Rent is spiking in cities across the country; a recent study found raising one (1) single child costs upwards of $300,000; and the federal minimum wage has stood at $7.25 since 2009. Even for those with considerably more economic privilege than others, student debt is a drain on resources at an increasingly difficult time, and wiping away just $10,000 may not offer much in the way of relief for many people.

High Salaries & High Debt Burdens

Jordan Handcox recently completed an orthopedic surgery residency and has $184,000 of student loan debt. The average orthopedic surgeon makes anywhere from $150,000 to $600,000, depending on where they live. But despite this comfortable salary range, which would be excluded from Biden’s $125,000 cap, Handcox says more generous student debt forgiveness—or even a reform like “significant reduction in or elimination of interest on student loans,” as she put it—would greatly help her family after years in school.

“I consider myself lucky that I have joined a profession where I should be able to pay it off without issue, barring any life setbacks, but my high-paying job has come at the cost of over 15 years of schooling and virtually no retirement savings well into my thirties,” Handcox told Jezebel. As a Black woman raised by a single mother, she said she was “taught that education was the key to upward mobility, so any student loans I took out I were the price of my end goal of financial freedom.”

But when Handcox graduated from medical school at the University of California, San Francisco in 2017, she made the “big financial mistake” of getting married. “We didn’t really think through what legal marriage would mean for us in terms of student loans,” Handcox said. With her and her husband’s incomes combined, she went from “being expected to pay about $200 in loans per month to approximately $1,800.” Even if she were eligible for the $10,000 in student debt forgiveness, Handcox says it would be a “drop in the bucket.”

Borrowers in Public Service

Alisa Bochnowski has over $136,000 in student debt between getting her undergraduate degree and her master’s of science in molecular microbiology and immunology at John Hopkins. But “infectious diseases and public health are not super well-paying fields,” and despite “making a decent salary” at her current job at a nonprofit, she says student debt has “definitely impacted my ability to save as well as pursue a doctoral degree.”

Bochnowski’s current plan is to “utilize the Public Service Loan Forgiveness [(PSLF)]” program in six years. Many graduates and individuals with advanced degrees end up working in advocacy, either for nonprofits or the public sector. Casey Trimm, an Ohio-based professional who works in education advocacy, graduated college with $80,000 in student debt. Trimm said she’s aware of the PSLF program that forgives the remaining balance of student debt for those in public service who have made 120 payments—but she and many others are uncertain about how to access it. The program comes with a number of caveats based on marital status and other factors, and a study from earlier this year found that of the 9 million borrowers eligible for PSLF, just 2% have actually received relief.

“Ten thousand dollars forgiveness would provide some sort of relief temporarily, but the way interest is compounded, it’s not really a long-term solution,” Trimm, who makes in the $50,000 to $60,000 range, told Jezebel. If student loan payments resume, Trimm will return to being out about $1,000 per month—a number that “really bogs me down.” In the coming years, her $80,000 in student debt will to reach six figures thanks to interest. And she’s pessimistic that PSLF will help her. “It’s not that successful of a program for people who work in public service.”

Jazmine Jibawi, who’s working toward a masters in public health at Tulane University, said student debt forgiveness for public health workers is “a public health issue” itself. Some estimates suggest the average income of those who graduate with a master’s in public health stands at about $111,410 per year, but many grads report graduating with tens of thousands in student debt.

“There’s no investment in the public health workforce,” Jibawi told Jezebel. By making an education in public health more accessible and allowing more people to enter the field, student debt forgiveness would result in “benefits that ripple out into the health and the needs of our communities overall.”

Jibawi entered the public health field at the beginning of the pandemic; at the time, she worked at a urology lab, but was motivated to study community health and pursue her master’s degree. She says many of her classmates have incurred upwards of $70,000 in student debt in the process. Public health workers have been essential to keeping schools and hospitals running at the height of the pandemic, Jibawi says. As the health system remains perennially strained, student debt is a major determinant in growing the public health workforce.

Means-testing for student debt cancellation can have the effect of reproducing the inequities in generational wealth—which are strongly defined along lines of race—that student debt forgiveness is supposed to alleviate. To be clear: $10,000 in forgiveness for qualifying borrowers is better than nothing. But this policy on its own will fall short of addressing the generational wealth inequality that determines who can and can’t afford college in the first place.