When the student loan forgiveness plan was announced, it quickly became as controversial as a Housewives reunion. As expected, Democrats mostly loved it, and Republicans universally hated it.
I can see both sides here. I totally agree with my friend CPA Howard Dvorkin, who insists that forgiving student loans does nothing to lower costs in the future – and that’s the key issue.
One of my favorite stories on the topic was from Jean Chatzky. She wrote about the impact of student loan forgiveness on women, and she did it the clearest way possible. (Check out Why Biden’s $10,000 Student Loan Relief Will Impact Women the Most.)
Even better, she sees Howard Dvorkin’s argument that you need to consider the cost of college and not just the amount of loans, she writes…
“My general rule of thumb is to look at your dream schools, but also look at the cost of those schools. Think about what you want to be when you grow up (we realize you may not know specifically, but you probably have an idea if you’re headed toward a higher or a lower-paying field) and then take into account what you expect your first year’s salary to look like out of college. You should try not to borrow any more than that in total over the four years (or so) that it takes to earn your degree.”
While I don’t think student loan forgiveness is a great idea, now that it’s done, I’m glad it will help a lot of women. I’m also encouraged because just the controversy itself might force the issue into the consciousness of young women who might not think about such things.
Last year, before any of the recent controversy, an important study was released by the American Association of University Women. Its conclusion: “Student debt is making it nearly impossible for many women to afford their basic living expenses after graduating from college.”
Three facts led to that conclusion…
- Women have more student loan debt than men.
- Women still earn less than men.
- Women have more expenses than men.
Meanwhile, The Hill recently reported:
- “Upon graduating and entering the workforce, women are paid on average 83 percent of what men are paid.”
- “Women also lost nearly 1 million more jobs than men during the coronavirus pandemic, exacerbating long-standing economic disadvantage.”
Regardless of what happens next – and there are some rumblings that the plan may end up in court – the upside is that women’s student loan problems might finally get the attention they deserve. If that happens, maybe there can be some real solutions, too.
