About five centuries ago in the year 2015, you may recall a raging debate about a photo of a dress. Viewers of the image were ferociously sp [Bloomberg](
Follow Us [Get the newsletter]( About five centuries ago in the year 2015, you may recall a raging debate about a [photo of a dress](. Viewers of the image were ferociously split as to whether the garment was colored black and blue, or white and gold. It became a virtual Hunger Games overnight, with everyone from families at the dinner table to [politicians]( in [Congress]( taking a side. Not much has quite divided the internet like that since the era of The Dress, but this past week, student-loan relief became a solid contender. And itâs no wonder why: About [1 in 5 Americans have student loans](. Jonathan Bernstein says the âfever-pitch rhetoricâ surrounding President Joe Bidenâs decision to forgive up to $20,000 in student loans is a [lawmaking lesson in disguise](. Legislators are constantly sleuthing around on the interwebs, looking for something â anything! â to excite their supporters. Bidenâs campaign promise on student-loan relief was one such thing, and the debate surrounding the decision has gotten [heated](, [chaotic]( and extremely [intense](. Although we all have Very Strong Opinions about whether student-loan forgiveness is a wise move, not everyone has the data to back up their stance. So letâs start with the basics. In 2015, the year of The Dress, total student-loan debt in the US was sitting pretty at $1.2 trillion. Today, that figure has risen by a handsome amount: More than 90% of the 45 million Americans who are burdened with federal student-loan debt will see some form of relief with Bidenâs plan, and an estimated 20 million borrowers will be free of student debt once the policy is put into action. But Bloombergâs editorial board argues that [any iteration of student-loan forgiveness is regressive](, because: - It hurts the 60% of Americans who didnât graduate college.
- It helps the wealthiest two-fifths of Americans.
- It will cost taxpayers [gazillions of dollars](.
- It adds flames to the inflation fire.
- It will encourage people to take out MOAR loans. It sounds bad. But whatâs the alternative? Millions of Americans have long relied on federal loans to cover the costs of higher education, and the breakdown in sums they owe might surprise you: The Great American Debt Landscape has evolved rapidly over the past decade, with student loans taking the lead around 2010, toppling other forms of debt like auto loans and credit-card bills: Overall, the debt load is somehow more uneven than your pandemic haircut (which was bad!!!), with some states clocking in way higher loan amounts than others: But geographic divides arenât the only ones when it comes to who owes student loans. âA 2016 study found that four years after earning a bachelorâs degree, the average Black graduate had about $53,000 in debt, nearly twice the level of the average White graduate,â Carl Romer and Andre Perry wrote earlier this year â a consequence of what they call â[federally engineered inequality](.â Decades of redlining prevented Black families from accumulating wealth in the housing market, while White families had no trouble doing so and ascending the path of upward mobility. This inequality seeps directly into higher education, Romer and Perry argue, because similarly qualified students end up graduating with very different debt loads depending on their race and family circumstances: Another factor to consider is age, with older Americans uniquely hard-hit. Alexis Leondis writes that retirees are often â[smothered by student debt in their senior years](â because they have fixed incomes with little financial wiggle-room. Sometimes the student debt they owe is their own â if they took out loans for extra schooling to earn more money later in life, for example. But often itâs loans they took out to help their children or grandchildren. Americans age 62 and older are the fastest-growing segment of student debtors, and a ton of them are currently stuck in a never-ending student-debt doom spiral: Some of them are forced to resort to dip into their Social Security benefits if they default â a practice that Alexis says Biden should end ASAP. As it stands, the governmentâs plan doesnât provide enough of a lifeline to alleviate these struggling seniorsâ financial burdens. Unlike other forms of debt, people canât simply discharge their federal or private student loans in bankruptcy. If graduate students were able to drop their loans in that manner, Allison Schrager says it would [force lenders to actually look at the risks involved]( when making these loans in the first place. âIn no other industry would a debt-financed investment thatâs the equivalent of going to medical school be considered the same as a film-studies degree,â she writes. The average debt load for students getting a masterâs degree is about $75,000, which is well over double the average sum that undergrads borrow: Clive Crook argues that professionals in their 20s can be in a solid financial position despite having student debt: âFuture doctors and lawyers might be making nothing at that point. This doesnât mean theyâre poor,â he writes. Perhaps [measuring the loan relief by predicted lifetime earnings]( would have been a more appropriate route for the White House. Over the past two years, [nearly everyone took advantage]( of the student-loan moratorium, even households in the highest income quartile (earning over $121,317), which carry [34% of total federal student loan debt](. But come 2023, student-loan payments will come roaring back, with Biden calling the latest extension the seventh and final one. Now is a great time to [start rejiggering your budget plans]( ahead of the restart. No matter which way you slice or dice the data, thereâs an overwhelming and undeniable amount of froth in higher education. In the same way that everyone agrees that The Dress was in fact, a dress, everyone understands that the student-debt doom cycle is a beast that needs to be tamed, one way or another. More Student Loan Opinions: Forgiving student debts is a no good, very bad idea, and [India is proof](, writes Mihir Sharma. Rachel Rosenthal spoke with Alexis Leondis and Allison Schrager on Twitter Spaces to discuss [what Bidenâs student loan relief plan means for the average American](. Navigating the [landscape of student debt is incredibly difficult](, writes Stuart Trow, especially if you live in the UK.
More Data From Bloomberg Opinion: Hereâs what happened when [when Minneapolis ended single-family zoning](. â Justin Fox [Inflation is squeezing the middle class]( like itâs one big, overpriced orange at the grocery store. â Andrea Felsted [Instagram: A post shared by Bloomberg Opinion (@...]( Notes:  Please send overpriced oranges and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before itâs here, itâs on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals canât find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter.
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