Although the Biden administration currently struggles with inflation, a Southern border crisis, a recession, and the ongoing conflict in Ukraine, it appears President Joe Biden is on the verge of announcing the cancellation of $10,000 in student debt. Since Biden decided to run for President, he made numerous promises to the American people. With young adults being crushed under the massive debts surrounding their education, Biden promised more than once to address the situation. And while he has been somewhat silent on the idea, it appears on Wednesday, he is supposedly making the announcement. Americans carrying substantial student loans might rejoice, but according to reports, the move would only benefit the wealthy. 

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According to CNN, “ the plan is designed to offer the forgiveness to individuals who earn less than $125,000 per year. It is not clear that a final decision on the details of the announcement has been made, and there could always be 11th-hour changes.” The outlet added, “In addition to that baseline of student loan debt forgiveness for individuals who fall under a certain income level, administration officials have also recently discussed the possibility of additional forgiveness for specific subsets of the population, according to sources familiar with internal discussions in the administration.”

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While canceling up to $10,000 per borrower sounds great, by 2031, it would cost a staggering $329 billion. And if that wasn’t bad enough, a Wharton analysis found that less than 32% of the funding would benefit borrowers in low-income houses. On the other side, for families who make over $82,000 a year, it benefits 42% of them. 

Discussing the latest move to come from the Biden administration, Colleen Hroncich, a Cato Institute education policy analyst, explained, “People in higher income households are more likely to have student debt and they owe more on average. So, most cancellation plans would benefit the wealthy more than middle-or lower-income families.” 

Another report, from the Brookings Institute, found that only 8% of student debt is owned by the bottom 20%. When compared to the wealthy, they hold one-third of the student debt. Colleen Hroncich added, “Postsecondary education typically results in much higher lifetime earnings — $1.2 million for a bachelor’s degree and $3.1 million for a professional degree like law or medicine.”

Again, while some push for student loan forgiveness, Colleen Hroncich warned, “All federal student aid creates market distortions through tuition and credential inflation. When government gives people money to attend college, there will be more demand for college. And when more workers have college degrees, employers start looking for workers with degrees even for positions that historically did not require one.”