NC senators propose bill to halt student loan debt forgiveness. What it means for borrowers
North Carolina senators Richard Burr and Thom Tillis, along with three other Republicans, introduced a bill that would prevent President Joe Biden from forgiving student loan debt.
If passed, the Student Loan Accountability Act would prohibit the government from taking any action to cancel or forgive the outstanding balances, or portions of balances of covered loans, according to a press release. The bill includes exemptions for existing federal student loan forgiveness programs, like Public Service Loan Forgiveness and Teacher Loan Forgiveness.
Canceling student loan debt would lead to higher inflation rates, incentivize colleges and universities to raise tuition and enhance the growing national debt, according to language in the bill.
According to Forbes, Congress won’t pass the proposed legislation since Republicans don’t control the House or the Senate. However, although student loan payments are currently paused, it’s unlikely that wide-scale student loan cancellation will happen any time soon.
Though Burr and Tillis oppose student loan forgiveness, data show that thousands of North Carolinians would benefit from it. According to data from the state Department of Justice, the majority of college students in North Carolina will graduate with student loan debt, and the average borrower “owes more than $25,000.”
Here’s what you need to know about the benefits of student loan forgiveness, and the chances that the Biden administration will address the issue.
How student loan forgiveness would benefit North Carolina borrowers
According to the Center for Law and Social Policy, student debt cancellation would lead to many benefits, including:
Advancing gender and racial wealth equity, since women hold more than two-thirds of all outstanding debt, and Black borrowers have higher average levels of debt.
Adding up to 1.5 million new jobs to the workforce.
Removing the burden for low-income individuals who aren’t able to make high monthly payments on their loans.
Freeing up funds for borrowers who have had to delay significant life events, like starting a family or buying a house.
More access to higher education for low-income individuals.
Will student debt be forgiven?
President Biden is considering at least $10,000 of student loan cancellation for borrowers, but it is unclear who would qualify for forgiveness, Forbes reported.
Progressive Democrats have supported up to $50,000 in cancellation of student loans, but Republican congressional leaders have said potential future proposals would face an uphill battle.
Some forgiveness advocates suggested Biden should use executive order power to address the issue. But others, including Biden himself, have questioned the legality of that idea.
Observer reporter Mary Ramsey contributed to this story.
