Biden’s Debt Relief Plan Leaves Out Gen Z

However, it’s become glaringly apparent that almost every one of those 4 million Americans are Millennial Gen Xers. President Biden has essentially left Gen Z out of it.

They found that the average Gen Zer has $20,900 in student debt, which is 13% higher than the average for Millennials. Additionally, the median debt among Gen Z is 14% higher than Millennials at $12,800.

Almost half of the 72.24 Millennials in the United States have student debt, so simply statistically speaking, it makes sense that President Biden decided to focus first on helping these 35 million people.

Biden had promised that he would forgive student debt during his campaign in 2020 because the vast majority of Americans were exceptionally frustrated with the student loan system. Specifically, Biden wanted to cancel the loans for former students who were misled by for-profit schools between 10 and 20 years ago.

He and the U.S. Department of Education agreed that the organization made “pervasive and substantial misrepresentations to prospective students about post-graduation employment rates, salaries and career services.” Therefore, those students deserved to be compensated.

In 2023, the Supreme Court denied one of the president’s plans to cancel $430 billion in student debt. If this bill had gone through, the majority of all borrowers in the U.S., including millions of Gen Zers, would have seen up to $20,000 of their debt forgiven. Still, the Supreme Court ruled that the federal government did not have the authority for such an enormous “bailout.”

From the job market to the cost of living, Gen Zers are starting their lives in the “real world” with disadvantages their Gen X parents could not have imagined.

The current job market is wildly uncertain. From the use of AI to the increase in labor costs, companies around the country are cutting back on new staff, and job opportunities are slim. Additionally, many companies that once only accepted applicants with college degrees are opening their doors to people who didn’t complete higher education.

To make matters even worse, the inflation rate in the U.S. has increased the cost of living to an almost outrageous price point. Millions of younger Americans are struggling to pay their utilities, rent and groceries every month, let alone pay back their debt.

SAVE, a plan from the U.S. Department of Education, offers millions of Gen Zers the opportunity to make smaller monthly payments on their student debt, which directly correlates to their income. Within this plan, some of their debt could even be completely forgiven over time.

There is already talk that millions of Gen Zers may refuse to pay their student loan bills and try to wait and see if future legislation offers them the same benefits. However, financial experts are warning Gen Zers against this course of action.

They also explained that “there’s no guarantee there will be forgiveness plans down the line.” So, while millions of Millennials got their student loans completely forgiven, it may never happen for Gen Z.