What is the average student loan debt for a US graduate?
President Biden has announced plans to cancel sizable amounts of student loan debt, how much does the average borrower have?
During the pandemic the Education Department has placed a pause on student loan repayments, giving graduates a bit of breathing room amid the economic turmoil of the last two years. The loan repayment relief has been extended several times will be extended to 31 December 2022.
The White House has announced a cancellation up to $10,000 with boosts for Pell Grant recipients, so long the the borrower makes under $125,000.
“No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action,” said the White House in their announcement - an attempt to bat away criticism from Republicans that argue student loan cancellation is a transfer of wealth from the poor to the rich.
In 2021 the average student loan debt per borrower is $39,351, which means an average monthly payment of $393, according to recent statistics from EducationData.org.
In total 43.2 million people currently have a student loan and that number is only increasing each year. Worryingly, around 2.6 million graduates owe more than $100,000 in student loan debt alone.
Lawmakers pile pressure on Biden to cancel student debt
Since taking office the White House has faced pressure from other Democrats to cancel student debt. Senators Elizabeth Warren (D-MA) and Chuck Schumer (D-NY) have been two of the loudest proponents.
Today is a day of joy and relief. President Biden is cancelling up to $20,000 of federal student debt for as many as 43 million Americans — a powerful step to help rebuild the middle class. This will be transformative for the lives of working people all across this country.
A group of more than 80 lawmakers from both the House and the Senate have signed a letter to President Biden, asking him to show some progress on the student loan cancellation. Last year Biden had requested the Education Department to prepare a report on his legal authority as president to unilaterally cancel student loan debt.
The letter included the signatures of Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren and it called on Biden to write off $50,000 of student debt per borrower. This would see around 36 million people, 80% of the total number with a student loan debt, have their debt completely cleared.
This newest wave of debt cancellation comes after smaller announcement made over the last two years.
During his first year in the White House he utilised various mechanisms to write off student loans for more than 675,000 borrowers and cancelling $15 billion of debt. A total of $7 billion was written off for those with disabilities, while $5 billion of student debt was cancelled thanks to the public service loan forgiveness scheme.Additional student loan write-offs will likely be on the way for certain groups, but there is little sign of a mass debt cancellation of the kind that Warren, Schumer and others will hope for.