Biden’s Plan To Cancel Student Loans Would Completely Erase Debt For Almost 40% Of Utah Borrowers
Roughly 300,000 people in Utah are paying off student loans, according to an analysis from the loan advising website Student Loan Hero.
That debt can place a heavy burden on many people and the broader economy, preventing some people from saving for retirement, buying a home and starting a family.
President Joe Biden is considering wiping away at least some of it with a plan to cancel $10,000 of loans for individuals across the country. If he can get Congress on board or has legal authority to do it through an executive order, about 37% of Utah student loan borrowers would see their entire debt erased. That would be the second highest proportion of borrowers in the country, Student Loan Hero’s analysis found.
“Absolutely, Utah is sort of on the lower end of the spectrum in terms of how it's impacted by student loan debt,” said Andrew Pentis, a loan counselor with the group. “But with that said, it's certainly not immune from the problem.”
Pentis said borrowers in Utah owe less than the national average — $31,046 compared to $36,689 nationally — in part because of relatively affordable in-state tuition at public colleges.
Still, Utahns pay an average of $282 each month on their loans. That can be a huge burden on people, especially those from low-income families, he said.
“Maybe that doesn't sound like a lot to maybe other borrowers or who are better off in their situations, but certainly student loan debt can weigh folks down.” he said. Without that debt, “maybe they take their average monthly payment savings and they're putting food on the table, going to fix up their car.”
Experts are divided, though, on how beneficial universal student loan forgiveness could be on the economy at large. Some argue it’s not the most effective use of taxpayer funds because people who attend college are generally better off than those who don’t and most are able to afford the monthly payments on their loans.
Others, such as University of Utah business professor and higher education finance researcher Marshall Steinbaum, say taking away debt could boost the economy by freeing people up to spend that money on other things.
He said as college has become almost a necessity in landing a job these days, more people go, including a growing percentage from diverse backgrounds and low-income families.
“The way I would phrase this is don’t look at the population of people who have student debt,” Steinbaum said. “Look at the people who don’t have student debt. If you look at everyone who’s alive today in the United States who doesn’t have student debt, you’ll have older people who never went to college as well as the younger people who were better off and went to college and didn’t have to take out debt to do that.”
Whether loans are forgiven, Steinbaum said, it won’t solve the underlying problem of rising college costs. That will require a whole other set of policy and political calculations.