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An analysis recently released by the Council on Foreign Relations (CFR) argued that federal and private student loan debt in the U.S. is currently at around $1.7 trillion.
Student loan debt is one of the largest forms of consumer borrowing in the U.S., despite many graduates now realizing how little value they get from their degrees once they enter the weakening job market. “Most economists see student loan programs as a sound investment in U.S. workers and essential for maintaining the country’s competitive edge, but questions remain about the appropriate level of federal involvement,” wrote CRF. (TAKE A POLL: Do You Believe Social Media Has Affected Our Younger Generation in a Negative Way?)
How Many Americans Are In Debt?
Around one in five Americans has some form of student loan debt. The average amount is around $30,000, but a small portion of borrowers tend to hold most of the debt. Roughly a third of all student loan debt is held by just seven percent of borrowers.
It’s Not Government Money
CFR argued that the “U.S. government invests in higher education for its people—through need-based tuition grants, student loan programs, veterans’ benefits, and research grants—because an educated and highly skilled workforce promotes national prosperity.” But it’s not the government that invests in higher education — it is you, the voter. All of the money used by the government is your money, taxed.
During the COVID-19 pandemic, former President Donald Trump paused repayments as a form of temporary relief for student borrowers. But since loan repayments started in October 2023, only half of borrowers have started paying back what they owe. (TAKE A POLL: Will Traditional Colleges Become Obsolete Due to Online Learning?)
Biden’s Proposal
While many tout Biden’s proposal of student debt relief as a good thing, it is actually far less impactful than most realize. Biden’s proposed executive order would only forgive $20,000 for Pell Grant recipients and $10,000 for non-Pell Grant recipients making less than $125,000 a year. The Supreme Court struck down this proposal in 2023. (TAKE A POLL: Is the Current Education System Adequately Preparing Our Children For the Future Economy?)
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