DeKalb County reacts to Biden’s student loan debt forgiveness: ‘It helps the people who need it most’

DeKALB – Some Northern Illinois University students say President Joe Biden’s student debt relief plan will help ease the burden will help ease the burden of tens of thousands of dollars in debt for borrowers, while others say they’re unsure of the economic ramifications.

Rosa Rodriguez, 31, an NIU senior studying public administration, said she’s not sure yet how the debt relief plan will help her just yet, but she’s happy. She said she can’t say whether debt relief will turn out to be a good thing in a decade and wondered if the policy would trigger more inflation, but think’s the forgiveness is helpful for those who need it.

“I know for the people that I know that are in school it’s a big relief,” said Rodriguez, of Downers Grove, whose sister will benefit from additional relief because of a Pell Grant. “Huge relief because, you know, sometimes you have to choose between paying your student loan or eating, so I think it’s a good thing right now.”

President Joe Biden on Wednesday announced his long-awaited plan to deliver on a campaign promise to provide $10,000 in student debt cancellation for millions of Americans – and up to $10,000 more for those with the greatest financial need, including recipients of Pell Grants – along with new measures to lower the burden of repayment for their remaining federal student debt.

Borrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for the $10,000 loan forgiveness, Biden said. For recipients of Pell Grants, which are reserved for undergraduates with the most significant financial need, the federal government would cancel up to an additional $10,000 in federal loan debt. Current students would be eligible for relief only if their loans were originated before July 1, 2022.

Biden also is extending a pause on federal student loan payments for what he called the “final time” through the end of 2022, and proposed capping the amount that borrowers must pay monthly on undergraduate loans at 5% of their earnings, down from 10%.

Michael Martinez, 19, an NIU sophomore from Franklin Park studying engineering, said he’s happy after hearing about the president’s student debt relief plan. He said he thinks the $125,000 yearly income cap is pretty fair. He said he thinks the policy is good for testing the waters to see how it affects the economy and to assess if more relief is doable.

“I feel like it helps the people who need it the most and it’s like intended to help the people who need it the most, so I think that’s a pretty fair cap,” Martinez said. “Could they raise it? Yeah, but I feel like it’s in a good spot.”

Timothy Schad of DeKalb, a 2014 NIU graduate, was on campus manning a Cru table, a christian organization that has been on university campuses for more than 60 years, when the new policy was announced.

“Well there’s just the questions of like, how is that going to happen? You know, where does that money come from or how is it going to work out?” Schad said. “You always kind of wonder, is that too good to be true? What’s the underside story of it?”

Schad said he finished paying off his student debt about a year ago, but stressed he’s not angry about the policy.

“Because it’s like, I took on that debt knowing that I need to pay it off, so I’m like, it’s my responsibility and I feel fine with it,” Schad said. “And for other people, if they need help – especially with the way our world is – everyone I think needs help. So, yeah, as much as people can get it, that’s all the better, as long as it really does help our whole economy.”

More than 43 million people have federal student debt, with an average balance of $37,667, according to federal data. Nearly a third of borrowers owe less than $10,000, and about half owe less than $20,000. The White House estimates that Biden’s announcement would erase the federal student debt of about 20 million people.

Proponents say cancellation will narrow the racial wealth gap – Black students are more likely to borrow federal student loans and at higher amounts than others. Four years after earning bachelor’s degrees, Black borrowers owe an average of nearly $25,000 more than their white peers, according to a Brookings Institution study. Some opponents, however, have said mass debt relief could worsen inflation or benefit only wealthy Americans instead of those dutifully making payments.

“It would not help people whose debts are not guaranteed by the government,” said NIU economics professor Carl Campbell, who added some may worry debt relief helps only wealthy Americans because those with higher education degrees tend to earn more income.

”I could see people complaining that it was unfair that it helped some people and not others.”

Campbell, NIU’s economics department chairman, said he thinks widespread debt relief could be “somewhat inflationary.”

“But it’s going to be spread out over a long period of time and not just giving people $10,000,” Campbell said. “They’re reducing their payments.”

A reduction of payments could free up money to spend on other needed aspects of life, Campbell said, like groceries, housing and gas.

“People will have more ability to engage in discretionary spending if they’re not making the student loan payments,” Campbell said.

During Ben Lunaburg’s freshman year at NIU, he incurred about $10,000 in debt from student loans. Now 19 and a sophomore from Hoffman Estates majoring in environmental studies, Lunaburg said he’s pleased to see Biden’s relief plan.

“I’m feeling very good about it, I’m happy that there’s an opportunity like this for kids, because I know there’s kids in even worse situations than I am,” Lunaburg said. “So for them to be offered something like this is – it’s really nice.”

Sarah Whitchurch, another full-time employee for Cru, graduated from NIU in 2021 as a history major.

“I‘m excited. I think we’ve kind of set up a system where higher education is expected but really prohibitively priced and I don’t think that’s a really fair, helpful way to do it,” Whitchurch said.

Whitchurch, who went to community college for two years before attending NIU, proposed a debt relief policy that’s even further tiered based on income because the relief may impact people differently.

“I think it depends a lot more on current income and socioeconomic background and thing’s like that. So I think a staggered debt relief would be a better system, but I’m intrigued to see where it goes,” Whitchurch said.

Camden Martin, an 18-year-old freshman, said he heard about the policy through a text from his mom.

“I think it’s a good thing, especially because, like, for the lower-income families they get more access to money that they could use for school,” Martin said.

Michael Day, a 66-year-old who has been the director of first-year composition at NIU for the past 20 years and who is set to retire in a month and become a professor emeritus, said he’s a fan of countries abroad that offer free college tuition.

“I think it could be more,” Day said. “I think it was a mistake to get students in debt in the first place. I think that the country needs to have a much more robust system of public education, and that includes university education.”