- President Joe Biden will forgive $10,000 in student loan debt for certain borrowers.
- Matthew, a Republican, is one such borrower and will have all of his debt wiped out.
- But Matthew fears the pardon won’t hold up in court and will be unfair.
Matthew is set to get all of his student loans canceled – but he’s skeptical if that will actually happen, or if the policy is even fair.
“I would be a beneficiary of this policy – if it comes to fruition. It would absolutely impact myself and my family’s future,” he said. “However, I don’t really consider this policy to be fair. I think it’s quite unfair. I think it’s quite unfair, and I think it sets a very bad precedent for moving forward.”
The 28-year-old, whose last name is known to Insider, lives in Salt Lake City, Utah. He is currently pursuing a Masters in Business Administration while working in real estate. Matthew, who is a Republican, said he got his undergraduate degree debt-free by going to community college for two years, working, getting scholarships and dipping into his savings.
When he entered his master’s program, his goal was always to pay his way. Then he started to hear the whispers about potentially lenient President Joe Biden $10,000 in student loan debtt.
“I knew this policy was a campaign promise made by President Biden, I knew it was something the administration was really aiming for,” he said. “I actually thought I saw it as a real possibility that it could happen.”
So he took out a loan, what he called an “educated risk”, in May. His thought: “If the administration forgives, then that’s great. And it’s done. If not, then I’ll go ahead and pay it back with the savings I’ve already accumulated.”
That moment ended up being exactly on the nose, with the Biden administration’s pardon extended to borrowers who took out loans before June 30.
He doesn’t know how the announcement will go through legally
But Matthew worries whether the ad could withstand legal scrutiny, particularly because it rests on the Heroes Act – a 2003 law that gives the government the power to provide debt relief in the event of a national emergency. This time, the national emergency is the pandemic.
“Personally, I believe that if it reaches the Supreme Court, it will be overturned. I don’t plan to spend any money or do anything at this time. I just wait and wait,” Matthew said.
Republicans hit back, noting that House Speaker Nancy Pelosi said the president does not have the power to cancel the debt. But the Biden administration has previously said it believes it has “strong” legal standing to grant the pardon.
“Of course people can challenge actions in court. It happens all the time. It happens to this administration,” National Economic Council Deputy Director Bharat Ramamurti said. said at a press briefing. “It’s happened to every administration in history. It will be up to the courts to decide whether these claims are valid or not. But we think we’re on a very solid legal footing.”
He also fears the announcement may be unfair
Matthew fears the announcement will set a precedent for an administration to start over, which he sees as unfair to Americans like him – people who have worked, budgeted and “done their homework on the kinds of majors in which they go, what type of jobs would be available and how long it would take them to pay off their debt.”
He also thinks it’s unfair to people who didn’t go to college to save money and instead went into fields like trades. “What makes student loan debt more virtuous than someone who took out a small business loan to start a food truck or something?” he said.
But, at the end of the day, Matthew thinks relief should be targeted to those who absolutely need it.
The Biden Administration said that almost 90% of the proceeds from debt cancellation will go to debtors who earn less than $75,000, and that black borrowers – who generally have higher student loan debt – will be particularly impacted, with the average debt of borrowers halving and a quarter of black borrowers seeing their debt completely erased. Defenders called for even greater relief to reduce inequity in borrowing.
Matthew’s concern is with the 10% of people who earn between $75,000 and $125,000 (or up to $250,000 jointly) who see relief.
“Why isn’t this a process that only affects those in public service?” he said. “Why not a process that only affects teachers or firefighters or police officers or individuals who make a real sacrifice or put their lives?”
Food stamps or Social Security — two programs that taxpayers subsidize, but don’t necessarily benefit from — are aimed at helping those with legitimate financial needs, Matthew said.
“In government and in society, there are programs that we absolutely need to monitor for those who need it most and help those who need it most to recover and return to the world,” he said. he declares. These are programs that aren’t meant to be abused — something he doesn’t necessarily think is true of student loan forgiveness, with its $125,000 income cap.
He ultimately thinks the blame for the student debt crisis lies with the cost of education
In an ideal world, when it comes to addressing student loan debt, “the first issue we would address is the cost of tuition,” Matthew said. He pointed to the rise in the number of education administrators earning six-figure salaries, which can drive up tuition fees. He also wouldn’t be opposed to increasing the amount of money low-income people receive in Pell Grants.
“Working in a bipartisan way to find a way to reduce student tuition at universities would be another appropriate step,” Matthew said.
Even so, if and when he gets his pardon, Matthew said it would be a “decent boon”. However, he would still be “discouraged” by the whole loan and education system.
“This issue doesn’t just affect me,” he said. “This is affecting millions of other people across the country, many of whom may need relief, especially with the skyrocketing cost of education and the idea that withdrawing $20, $30, $40,000 a year, depending on what program you’re in. , is normal. I think that’s something we need to address more than giving $10,000 to 43 million people.