Who student loan forgiveness would most help

Women would be among the biggest winners of student loan forgivness.

Ines Fraile | iStock | Getty Images

Certain critics of student loan forgiveness have argued that the policy would largely benefit the relatively well-off, pointing out that college degrees lead to higher earnings.

However, new research finds that the biggest benefits of cancelling student debt would go to those with the least wealth, and Black families in particular.

Cancelling $50,000 for all borrowers, which Senate Majority leader Chuck Schumer, of New York, and Sen. Elizabeth Warren, D-Mass., have been pushing for, would wipe out more than $17,000 per person among Black households in the bottom 10% of net worth, according to researchers at the Roosevelt Institute. Average forgiveness would be over $11,000 among white and Latinx households in that lowest range of net worth.

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Meanwhile, average cancellation would be just $562 per person for those in the top 10% of net worth.

“These analyses indicate that student loan cancellation policies are an overall societal good,” the researchers at the Roosevelt Institute write.

Here’s who else would benefit big from student loan forgiveness.

Those who attended for-profit schools

Women

Older borrowers

More than 20% of the country’s outstanding student loan debt is held by people over the age of 50, according to data by higher education expert Mark Kantrowitz.

Many of these older borrowers are struggling. The average balance for borrowers age 50 to 61 was $42,290.32 at the end of 2020, according to a CNBC report on U.S. Department of Education data, while borrowers 62 and older owed, on average, $37,739.13.

One-third of student loan borrowers over the age of 65 are in default, and half of those older than 75 have fallen behind, according to a report by the Government Accountability Office.

And tens of thousands of seniors currently have their Social Security benefits garnished because of an unpaid student loan.

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