856,000 Hoosiers in limbo as Supreme Court ponders student debt relief
INDIANAPOLIS (WISH) — The Supreme Court heard arguments from two lawsuits attempting to block the federal student loan forgiveness program that would provide relief for more than 856,000 Hoosiers.
Ball State economist Michael Hicks said this could help many borrowers in both Indiana and the country.
“The rate on these and the inability to get out from under them mean that households, unlike a car that you made a mistake on you can’t take it back to the dealer, you’re stuck with that and there’s no way to get out from underneath it and there’s a number of households that continue to accrue debt,” Hicks said.
Hicks said there is a significant cost associated with this program, equivalent to around 1% to 2% of the current national debt which stands at over $31 trillion.
“This debt forgiveness would be anywhere in the $400-600 billion range. It’s a non-trivial component,” Hicks said.
Those who chose not to take loans are some that could be against the program.
“Just from an equity standpoint, this loan program, while it provides benefits to many households and many individuals who took loans, it’s also being paid for by people who for very different reasons didn’t take loans and that obviously won’t sit well with them,” Hicks said.
Hicks said the average student debt in Indiana is around $28,000.
“Eliminating debt would allow most young households to purchase homes, to purchase automobiles, to begin saving for retirement,” Hicks said.
Hicks said it is important to rework the Public Service Loan Forgiveness Program to make it easier for loan holders to participate.
The decision from the Supreme Court on the Biden administration program is not expected until sometime in June.