Student debt in the U.S. has ballooned to over $1.7 trillion since Congress first allowed college students to borrow from the government in 1958. This debt has varying effects on students, workers and the larger economy.
“We see the student debt crisis when it comes to individual student loan borrowers. We see how student loan borrowers struggle to save for retirement, to have emergency savings, to buy houses, to start small businesses,” Student Borrower Protection Center former executive director Seth Frotman told CNBC.
In the last few years, though, activists from both sides of the aisle have called for the president to do something about student debt. Many have even pushed for outright cancellation.
“It is abundantly clear that under a statute called the Higher Education Act, the president of the United States has the legal authority to cancel federally owned student debt,” said Rep. Mondaire Jones, D- N.Y.
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Some argue that debt cancelation isn’t the answer and would mostly benefit wealthier borrowers who don’t have a problem paying off their loans on time.
“If I were to say to you, would you borrow one hundred thousand dollars to go to Harvard Law School, you wouldn’t blink and say yes, that’s clearly a good deal,” Wellesley College economics professor Phil Levine said. “We shouldn’t be absolving those people off their debt. They made an enormous investment that’s going to pay off, really, a lot.”
President Joe Biden has been largely silent about a plan to broadly cancel student debt since taking office, even though he campaigned on canceling up to $10,000 in student debt for all borrowers. However, his administration has absolved some student debt for certain groups like borrowers with disabilities and active duty service members.
Watch the video above to learn more about the origins of the student debt crisis, the different options the president has explored to cancel it and the many proposals about how to fix the system for the future.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.