The Biden Administration along with the Department of Education has announced a new three step plan to help working and middle-class Americans pay off their student debt. They are as follows: An extension of the student loan repayment pause through the end of the year, providing debt relief of $10,000 to $20,000 for low to middle-income families, and making  student loan payment plans easier for borrowers by lowering the amount someone is required to pay per month to 5% their discretionary income. But how much is this plan really going to help lower to middle class Americans?

The intention of this plan is to make it easier for lower to middle class Americans to pay off their student debt, after all it’s at minimum $10,000 ($20,000 if you are a recipient of the Pell Grant) to pay for school which you did not have before, but how much will it really help? There are approximately 48 million people who owe student debt, if only a third of them apply for debt forgiveness and are granted the minimum of $10,000 in forgiveness, that is a total of $158.4 billion that will not just disappear into thin air, it has to come from somewhere.

It can come from two possible places. 

The first is directly from the U.S. government, taking on the debt for themselves making the economy worse than it already is and speeding up the arrival of the fast approaching recession and further plummeting the value of the U.S. dollar. This makes the living conditions for everyone in the U.S. harder, especially those for whom this plan is supposed to help.

The other solution is for them to increase our taxes, and have us pay it off ourselves, which in turn will lead to prices being adjusted so that business owners can keep their overall income, which again, will make life harder for the people this is supposed to help.

You can try and argue that they can just increase taxes on the rich and have them pay it off but that’s genuinely a very naive perspective. The rich elite are not going to do anything to jeopardize their money, because at the end of the day it is a game of money and that’s all that really matters to them.

So what is a better solution to this student debt issue? After all, college is ridiculously expensive, costing the average American roughly $10,000 per year. The most obvious solution is to decrease the price of college to something that more accurately accommodates the needs of the school and reduce unnecessary spending, such as the installation of giant touch screen televisions which act as glorified white boards, and selling unused and unwanted equipment.

Another solution is to lower the cap on the amount of interest we can charge a student, after all, they can not even pay the amount they owe. Do you really think that adding more money to that pile is gonna give them the ability to pay it off all of a sudden? No, of course not. The debt forgiveness plan is a very short term solution to this problem and it will have a more disastrous outcome than what people think. We need to think about the bigger picture when it comes to stuff like this and in our country’s current economic position and that picture honestly isn’t looking too hot.