How much does the average American owe in student loan debt?
Current Event Friday
Critical Analysis
Based on the data from the visual above, as of Q4 (the fourth quarter) of 2022, how much did Americans owe in student debt?
Based on the data from the visual above, describe what has happened to the size of American student debt since 2006.
Since 1995 student debt has increased 7 fold (times). Currently, across the United States, 45 million people owe $1.75 trillion for federal loans taken out for college — more than they owe on car loans, credit cards or any consumer debt other than mortgages. Why do you think student debt has ballooned (grown so much bigger)?
Last year, President Joe Biden announced plans to cancel $10,000 of student debt for millions of Americans and as much as $20,000 for low and middle income groups who have received a Pell grant in the past. The loans will be given to those who earn under $125,000 per year, or whose families earn under $250,000 per year. How would this plan impact your school and career choices?
The average federal student loan debt balance is $37,717. Many Democrats have been pushing Biden to cancel student debt. But Republicans and even some Democrats are not on board with Joe Biden’s plan. Critics from both parties say widespread debt forgiveness is unfair to those who tightened their belts to pay for college. And some economists have raised concerns that debt relief will add to inflation by giving consumers more money to spend. Others claim that cancelling student debt will just encourage universities to raise their tuition. What is your opinion of this debt cancellation?
Mr. Biden used executive action, rather than legislation, to forgive the loans. Based on your knowledge of the U.S. political system, why did Biden use executive action instead of going through the legislative process?
The Supreme Court ruled on July 30, 2023 that the Biden administration had overstepped its authority with its plan to wipe out more than $400 billion in student debt, dashing the hopes of tens of millions of borrowers and imposing new restrictions on presidential power. How is this an example of checks and balances?
When creating a new nation, one of the main concerns of the Framers was to prevent tyranny. The Declaration of independence was basically a break up letter from the American colonists to King George III. If president Biden can simply use an executive order to wipe out student debt, what else could he do, and is this debt cancellation (whether you agree with it or not) an example of governmental overreach and tyranny?
All of that student debt comes from people borrowing money to go to school (college, community college, graduate school, professional clown school, etc.). One reason student debt is going up is because government funding for schools is going down (there are other reasons as well). Make a claim about whether the U.S. government should increase educational funding.
The data from the visual comes from the U.S. Federal Reserve. The Federal Reserve System is the central bank of the United States. It performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. If you are still awake, you can read a little bit more about the Federal Reserve (known to its friends as, “The Fed”). In your own words, describe the job of the Fed.
Learning Extension
Action Extension
Contact the White House and let President Biden know what you think of his decision to cancel some student debt.