The Future of Student Loans

Marilyn Gardner, Lawyer
2 min readFeb 6, 2023

The Debate

The rising cost of education and the volume of student loans need to be addressed to prevent the effects of debt from affecting future generations. Policymakers and experts agree that rising student debt can negatively affect the financial goals of young people.

They argue that although the older generations could pay for their education, the situation has changed for the younger ones due to the high cost of tuition and the COVID-19 epidemic.

Student loans are typically harder to discharge in bankruptcy than other consumer debts. In court, borrowers must prove they are in financial hardship to get their loans erased.

Although policymakers and experts agree that student loan debt can negatively affect the financial goals of young people, they have different ideas on how to address the issue. For instance, some believe that loan cancellation should be universal, while others think targeted relief is needed.

According to some analysts, the perception that college gives students the only path to success in a lucrative job leads to higher demand. It drives up the cost of education. During the past few years, politicians from different political parties have advocated for increasing access to technical and career education.

The Biden Program

The Biden administration’s program, expected to help about 40 million borrowers, falls between targeted and large-scale debt relief. It provides up to $20,000 in debt reduction for recipients of federal grants and non-Pell grant recipients with a yearly income of less than $125,000.

The program may reduce the federal government’s student loan holdings by about $441 billion. About 8 million borrowers will automatically receive debt reduction, while the rest will have to apply for forgiveness by December 31, 2023.

Aside from debt relief, the program aims to reform the student loan repayment system. It will cap the minimum monthly payment for undergraduate loans at 5% of the borrower’s discretionary income.

The application process’s complexity and the program’s participants’ low success rate have garnered criticism. Despite this, the Biden administration noted that its plan would allow more people to qualify for student loan forgiveness.

Critics of the program also raised concerns about its feasibility and cost. For instance, the cost of debt cancellation will reach $400 billion over three decades. Other groups claim that the lower minimum payment will increase the cost of living and harm taxpayers.

Despite the program’s adverse effects, supporters of the initiative noted that it benefits the country. Economists also said that it wouldn’t increase inflation rates. Supporters of the program indicate that it would allow graduates to take on lower-paying jobs in the public sector.

This blog was previously published on January 6, 2023 at