Residents and politicians in Central New York are expressing mixed reactions to President Joseph R. Biden’s student loan debt forgiveness plan. 

A week ago, Biden announced his plan to forgive $10,000 in student loan debt for each borrower who makes less than $125,000 per year, or for married couples who make less than $250,000 per year. 

Individuals who received Pell Grants, which are federal grants provided to undergraduate students who have exceptional financial need and have not earned a bachelor’s, master’s or professional degree, qualify for up to $20,000 in debt forgiveness. 

In addition, Biden extended the student loan payment moratorium to Dec. 31. 

On Monday, Biden tweeted that every year, the U.S. Department of Education will publish a list of colleges that leave students with exorbitantly high levels of debt, which will warn students about attending these colleges.  

Community members discuss the impact of debt forgiveness

Stephen Wu, the Irma M. and Robert D. Morris Professor of Economics at Hamilton College, said that student loan debt forgiveness can be helpful not only for recent graduates but also for people who had to drop out of college because of exorbitant costs by allowing them to re-enroll and complete their degree.    

“Ultimately, it’s a start. It’s a modest number, in the sense that it will help a lot, but for some it won’t be considered a huge dent because if they have significantly higher loans, it’s not going to do quite as much,” Wu said. 

Inflation is going up in the U.S., and some people are worried that getting rid of student loan debt will make inflation go up even more.

Wu said that this is not a huge concern to him.

“I think it certainly could impact inflation a little bit, but I don’t know if it’ll have a major, major impact, because of the numbers we’re talking about. Say, $10-to-$20,000, that’s not all right away, it’s not a lump sum that just comes back,” Wu said. “It’s more like monthly payments, let’s say $500-$600 per month, that get forgiven each month, not just in one big chunk.”

“In that sense, I think the impact on inflation will be fairly modest, not a huge worry,” he added.     

Laurel Frisbee of New Hartford, graduated from Suffolk University in Boston, this past May. 

She began her college career at Emerson College in Boston, transferred to Mohawk Valley Community College after a year, and has spent the last two years at Suffolk University. 

Both Emerson and Suffolk Colleges are private institutions, and while Frisbee received financial aid from both, she had to take out private and federal loans in order to attend the colleges. 

Biden’s loan forgiveness plan only covers federal loans, but the $10,000 would completely wipe out all of Frisbee’s federal loan debt, allowing her to focus on repaying the private loans. 

“It gets a little complicated and overwhelming to even look at my loan balance, so the fact that one of them could be completely forgiven is a huge step in the right direction for me,” she said. It would affect how I go forward; it would affect my plans for grad school. I’d be able to go and take out another loan, or just pay the tuition on my own.”  

Frisbee was accepted to American University in Washington for her Master’s Degree in the fall, but her outstanding loan debt and American University’s high tuition rate led her to defer and spend the next few years working in Utica.    

New York politicians weigh in 

Reps. Claudia Tenney, R-22, New Hartford, and Elise Stefanik, R-21, Schuylerville, have voiced their fierce opposition to the debt forgiveness plan. 

In a statement released Wednesday, Aug. 24, Tenney said that Biden caved in to “far-left special interests” and that his actions were “wholly illegal.” 

“If President Biden wants to tackle the issue of student debt, he should start by following the law,” Tenney said in the statement. “Instead of unilateral executive action that is overreaching, irresponsible, and costly, Joe Biden should work with Congress to take meaningful steps to tackle soaring higher education costs.”

Stefanik also accused the plan of being illegal and reckless.  

Tenney and Stefanik joined almost 100 House Republicans in signing a letter asking Speaker of the House Nancy Pelosi to act upon Biden’s “blatant overreach.”  

“[Biden’s] move transcends the policies surrounding student loans. This is an illegal act by a President desperate for a political win,” the letter said.   

The President does not have the legal authority to forgive all student loans by himself; Congress has the power of the purse. However, the Department of Education claims that it has the power to forgive student loan debt based on the HEROES Act, which gives the Secretary of Education the ability to provide grant relief to student loan requirements during specific periods, like the COVID-19 pandemic. 

Assemblywoman Marianne Buttenschon, D-119, Marcy, said that she is aware that student loan debt is an issue, but that she has questions about the plan itself. 

“It has been suggested that [the plan] will face legal challenges before it moves forward. What are the estimated legal costs?” Buttenschon asked. “Second, the cost of this proposal is  $32 billion, where will this money come from, the same students that will be seeing relief will be paying for how many years? What are the administrative costs?” 

Many Democrats, like Sen. Kirsten Gillibrand, praised Biden.  

“Democrats have been delivering for middle-class families struggling with inflation in this economy, and today, President Biden is delivering yet again in alleviating at least $10,000 in student loan debt for those who need the relief most. This policy is supported by a bipartisan majority of Americans and will help create jobs, increase home ownership, and spur new small businesses,” Gillibrand said in a Wednesday, Aug. 24 statement.