Even if I'm not getting student loan relief, it's still a very good thing

As a Gen Xer still paying student loans, I was trying all day to dig into what this actually meant for me.

In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.

I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I

— President Biden (@POTUS) August 24, 2022

The $20K write-off for Pell Grant recipients was not in the details that were leaked out to the press last night. Pell Grants go to lower-income students, and as this Education Policy Professor at Southern Methodist brought up, targeting Pell Grant recipients give an extra boost to one traditionally underrepresented group in particular.

I cried today on a very official phone call when I heard that the simulation #s showed that around 500k Black people would be moved from negative to positive net wealth https://t.co/1ryXVRvESQ

— Dominique Baker (@bakerdphd) August 24, 2022

WEALTH is the key word to me here. Because what getting rid of student loan debt will do for many people is free up the hundreds of dollars that have been used to pay off that debt.

The One Wisconsin Institute did a survey a few years back on the economic effects of student loan debt, and noted that those with student loans were much less likely to buy a new car or home.

That extra demand maintains and adds jobs (including a lot of blue-collar jobs), and go into investments that grow and lead to real social mobility.

But I refinanced my student loans into a lower rate in March 2020, right before the COVID-19 pandemic broke wide and the Fed drastically cut interest rates (which cut my interest rate further). That paid strong dividends for me, and likely saved me around $800 a year. However, it also led to this note when I logged into my student loan account today, to see what this might do for me.

The recent announcement regarding student loan forgiveness is only applicable for Federal student loans. Any loans serviced by Firstmark Services are private loans which are not included in the Federal government's forgiveness package. You can refer to the studentaid.gov website for additional information.

Well that sucks. But I kind of expected it, because I wasn't eligible for any of the student loan pauses that have been in place for the last 2 1/2 years either (I'd have kept paying anyway. I have the money and don't need that principal hanging over me).

I also wasn't locked into the 6-8% interest rates that many student loan debtors had, which is an absolute killer for many and is why some are complaining that $10K isn't enough - because they might owe more today than when they originally took out the loans. That's one reason I'm not complaining about being left out of Biden's student loan relief (even if it would have helped me a lot).

The other reason? I'M NOT A WHINY A-HOLE! I don't resent people that are getting a break on this - I know that paying student loans is something that holds back a lot of people from a better life in this country, and it's been an increasing amount since many parts of this country chose tax cuts over educational opportunity over the last few decades.

And before you say "what about people who didn't go to 4-year schools. HUH, JAKE? HUHHHH?"

1. A whole lot of blue-collar workers had to go into student loan debt to get their 2-year degree and/or certification for their jobs. They'll be helped, too.

2. The improved economy due to student loan relief pays off in many sectors, including many service jobs and in demand for homes, landscaping, and everyday purchased items that are produced in this country by a lot of workers and American companies.

Is this student loan relief package a cure-all for the increasingly higher cost of college and what can be a lack of payoff for what some people put in to a 4-year degree? Especially for some marginalized groups that were taken in to try to get a leg up from the bad circumstances they were in? Absoltuely not. And we need re-evaluation that goes far beyond this one-time bit that will help a lot of people, but not everyone that could use it.

But I'll go back to something else that SMU professor said today.

I'll be explicit, there's more to be done for college affordability, to redress past harms with loans, and with our larger social safety net. The joy of being human is holding these tensions, celebrating the wins while recommitting to the work ahead.

— Dominique Baker (@bakerdphd) August 24, 2022