President Biden has committed the government to erasing some student loan debt for as many as 43 million Americans at a huge cost to taxpayers. A lot of borrowers think it’s a great idea... others not so much. Scott Thuman talks to students and taxpayers and gets an education from people on both sides of the controversy.
The following is a transcript of a report from "Full Measure with Sharyl Attkisson." Watch the video by clicking the link at the end of the page.
Scott Thuman: You've heard all of the clamoring for the president to do something. Give me a show of hands — who thinks that's a good idea?
A future political policy-maker, aspiring doctor, and potential journalist, all weighed down with varying degrees of debt, but a similar outlook on how they got there.
Cameron Bowie: I'm Cameron Bowie. I owe roughly $40,000.
Josh Cadwell: I'm Josh Cadwell. I have around $400,000 in student loan debt.
Kennedy Smith: My name is Kennedy Smith. I just finished my first year. So, as of now, it's about $7,000.
With more than $1 trillion in student debt in America, President Biden, in late August, came through on a campaign promise to slash what students owe on loans they took out to pay for college.
President Joe Biden: Using the authority Congress granted to the Department of Education, we will forgive $10,000 in outstanding federal student loans. In addition, students who come from low-income families, which allowed them to qualify to receive a Pell Grant, will have their debt reduced $20,000.
Relief is expected to begin in January, just as a government-created freeze on loan repayments is lifted.
These students, questioning how much good it will really do in the long term.
Josh Cadwell: I don't understand how people in 10, 20 years are going to be able to afford college. Like, the student loan debt, what is it? It's gone up eight times since 2003, 2004. What's that statistic?
That statistic is eye-opening.
Today, more than 43 million borrowers owe more than $1.6 trillion in outstanding federal loans. The rising cost of tuition, a big reason.
For instance, out-of-state tuition and fees at the University of Michigan, Ann Arbor — one of the most expensive public colleges in the nation — hit more than $50,000 this year, up more than $30,000 since 2001.
Scott Thuman: Kennedy, you raised your hand. Why do you think that they should get some help sent your way?
Kennedy Smith: It is our government's job to help people. I don't necessarily think it's 100% fair to say, "Well, you made this decision, now deal with it," especially since they are federal loans.
Scott Thuman: Cameron, why not? Why don't you think that there should be student loan forgiveness?
Cameron Bowie: Well, when you go to college, you are effectively buying a product. Much like a new car, when you go to buy a new car, you have to sign on the dotted line. You've made a conscious decision to go into school, to take out that money, and it's your duty to at least attempt to pay them back.
Scott Thuman: Josh, you've easily got the largest tab.
Josh Cadwell: Do I?
Scott Thuman: You're not looking for the government to help you out?
Josh Cadwell: I don't think student loan debt should just be wiped away. I think that's a bit extreme. So for me, I'm more in the middle where, for people that are struggling, we should have that option for them. Like if you're making $1-2 million a year, you should have to pay that off.
Kennedy Smith: If you think about what our government is paying for, they're paying up the wazoo for military budgets, for aid in other countries, and I do not want to make it seem like this is a simple issue. It is extremely complicated. But if the government can produce this money out of thin air, why can they not do it for us?
And with inflation driving up the cost on everything from food to fuel, dragging millions of Americans further into debt, many recoil at the cost to the average taxpayer, which, it turns out, could be about $2,085, according to one budget model.
For many parents who have already paid their children’s way through school, the idea of forgiving student loans has been a hot topic for years. As in this confrontation back in 2020 with then-presidential candidate Elizabeth Warren.
Parent: "My daughter is getting out of school. I've saved all my money. She doesn't have any student loans. Am I going to get my money back?"
Sen. Elizabeth Warren: “Of course not."
Others say there is an argument against Washington intervention, especially from the millions who chose not to go to college and don’t believe they should pay for the decisions of others.
A study released in 2020 revealed more than 70 million active workers don’t have a college degree. Among them, Ed Evans, who owns this Baltimore-area auto body shop.
Ed Evans: I feel slighted. What am I going to get? You know? My tax dollars are going to pay for someone else, and I didn't get anything.
Evans started working here after high school, making $3 an hour.
Ed Evans: You know, I was always good with my hands. I had a hard time getting through school. I chose the automobile business.
Now the owner and his son a partner in the business, Evans employs nearly a dozen workers, all who decided to take up a trade rather than pursue a path to college.
Ed Evans: College is not for everybody. You can make money in this business, but it's work. I got guys making $100,000 that work for me. But you got to start at the bottom and work up.
Scott Thuman: I'm guessing then that's why you have a little more of a reaction when you saw this decision by the White House.
Ed Evans: Right, it's just not fair. How many hundreds of thousands of people have paid for their children, or how many paid for it themselves and took the loan out and paid it off. How is that fair to them? It's not. It's not fair at all.
Scott: The Biden administration says it has the authority to forgive those loans especially under the national emergency created by Covid. But with the president recently declaring the pandemic over, some argue he has little ground to stand on to cancel up to $1 trillion in debt. And the fight may very well end up here at the Supreme Court.
For Full Measure, I'm Scott Thuman in Washington.
Watch story here.
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