[New York Diary] U.S. Student Loan Debt Cancellation Sparks Controversy... White House Targets Lawmakers

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[Asia Economy New York=Special Correspondent Joselgina] U.S. President Joe Biden has announced a sweeping student loan forgiveness plan ahead of the midterm elections in November, sparking heated debate. The unprecedented measure targets about 43 million beneficiaries, amounting to approximately 400 trillion won. The intention is to ease the repayment burden of student loans to help young people and the middle class maintain stable lives and to address structural inequality, but voices criticizing it as unfair are also growing. As calls from the Republican Party and others that "loan forgiveness is unfair" continue, the White House has even publicly targeted lawmakers.

The student loan issue is considered one of the social issues akin to a "time bomb" in the United States. Michelle, who graduated from Louisiana State University a few years ago, said, "It is very easy to find people in their 20s and 30s with college student loan debt in the U.S.," adding, "In my case, I expect it will take more than 10 years to repay." According to the White House, the current outstanding student loan balance in the U.S. is about $1.75 trillion (approximately 2,330 trillion won), averaging about $37,000 (about 50 million won) per person. People start their social lives already burdened with tens of millions of won in debt.

Moreover, with tuition fees soaring every year, the amount of student loans per person is increasing. According to the Federal Reserve Bank of New York, as of the end of June, the student loan balance increased by 18% compared to five years ago. The College Board reported that over the past 30 years, average college tuition in the U.S. has more than doubled even after adjusting for inflation. Public school tuition rose from $4,160 to $10,740, and private school tuition jumped from $19,360 to $38,070. Students unable to cover expensive tuition fees resort to high-interest private loans exceeding 10%, and as interest burdens grow, some give up repayment entirely and fall into bad credit. Currently, 16% of borrowers are confirmed to be in default.

Amid this, the Biden administration is pushing forward a plan to forgive up to $20,000 (about 27 million won) per person in student loans through an executive order, not through congressional legislation, dividing American society. Skyler, who graduated from a university in Wisconsin and is repaying tens of thousands of dollars in student loans while working in New York, candidly called it a "grateful policy." He said, "It felt endless to repay the enormous student loans in full," adding, "Now I feel like I can see the future of how to buy a house, start a family, and save money."

Opposition is also strong. Earlier this year, a YouGov survey showed that nearly half of Americans, 49%, supported forgiving public college student loans, while 35% opposed it. The general consensus is that it is unfair. U.S. Republican Senator Ben Sasse criticized, "Ultimately, President Biden's debt forgiveness plan forces blue-collar workers to subsidize white-collar graduate students." Republican Representative Michael Kelly also argued, "Are we going to make plumbers and carpenters pay off the debts of Wall Street advisors and lawyers? It's not only unfair but also a bad policy."

The student loan issue is a field where populist policies are easily implemented, as it has been mentioned as a campaign promise in every U.S. election. This is why criticism arises that it is populism ahead of the November midterm elections. There are also concerns that while the central bank is implementing monetary tightening policies to curb soaring inflation, pouring massive amounts of money on the other side may instead fuel inflation.

As the political controversy escalated, the White House’s unusual response on social media also drew attention. On its official Twitter account, it retweeted statements from multiple Republican lawmakers criticizing student loan forgiveness, including Representative Marjorie Taylor Greene, while specifying how much loan forgiveness they received through the PPP (Paycheck Protection Program). This is seen as a response to the political controversy and fairness debate surrounding the forgiveness plan.

According to the White House, Representative Greene, who criticized the Biden administration by saying, "It is completely unfair for the government to say it will forgive debt," received $183,504 (about 240 million won) in PPP loan forgiveness. Representative Kelly, who argued, "It is a bad policy to make plumbers pay off the debts of Wall Street advisors," was also confirmed to have received $987,237 (about 1.326 billion won) in PPP loan forgiveness. The PPP was a loan forgiveness program introduced during the Donald Trump administration to support small businesses and self-employed individuals hit hard by COVID-19.

The Washington Post (WP) reported on the White House’s unusual targeted response via its official Twitter account, describing it as "an unusually passionate and personal counterattack." These tweets each received 200,000 to 300,000 likes, becoming some of the most engaged tweets since the Biden administration began.

Debt forgiveness is a complex issue with social and political factors to consider. Charlie, who lives in Manhattan, said, "Since the midterm elections are approaching, it is natural that fairness controversies arise," but added, "I don’t want to divide people into those who benefit and those who don’t." The real issue is why they ended up with tens of thousands of dollars in student loan debt.

In an NPR poll conducted last June, more than half of Americans supported forgiving $10,000 per person in student loans. Moreover, over 80% of Americans identified lowering college tuition as the top priority.

This content was produced with the assistance of AI translation services.