- Borrowers will soon be able to apply for student debt relief from President Joe Biden.
- Labor Secretary Marty Walsh said debt cancellation could help people buy their first home.
- Pardoning federal marijuana convictions will also help more people get better jobs, Walsh said.
With jobs booming, people still comfortable quitting for a better deal, and layoffs still near record highs, the job market is strong — and some workers could get an extra boost when they get student debt relief.
“It will have a bit of an impact on workers, allowing them to free up a bit of their ability to maybe search and buy that first home, to be able to invest that money,” Labor Secretary Marty Walsh said. to Insider. .
Student debt relief — which borrowers can start seeking this month — is unlikely to have much of an impact on the labor market, according to Walsh. It will be difficult to “know the full impact” of the relief for some time, but it can help ease budgets or allow borrowers to work towards things like home ownership.
“I think a lot of these people who are going to get debt relief might be able to put a few extra dollars in the bank now for potentially their first home,” Walsh said.
As Insider has previously reported, the links between student debt and homeownership are significant. A 2022 National Association of Realtors survey found that of those who said saving for a down payment was the “most difficult task” in buying a home, 43% said student debt was the expense to blame for their financial difficulties.
In late August, Biden announced up to $20,000 in federal student loan forgiveness for borrowers earning less than $125,000 a year. The implications of the policy are significant – it is expected to completely wipe out the balances of around 20 million borrowers while specifically helping those on low incomes and from minority communities.
A borrower previously told Insider that the debt cancellation was a huge relief for him and that it was “the first time I felt directly affected by something like a political order or the passing of something.” .
“The most important thing for me is that I no longer have to worry about losing my house,” they said.
And while Republican lawmakers have pushed back against the plan, calling it costly, illegal and unfair, Democratic lawmakers have argued the opposite – it’s an economic stimulus that will allow millions of Americans to pump money back into the economy. economy and save for other expenses. , like buying a house.
“Student debt is preventing entire generations of young adults from buying homes, saving for retirement, starting families, and more,” Senate Majority Leader Chuck Schumer previously said. said. “It is a particular burden on black borrowers.”
And HUD Secretary Marcia Fudge said last year that with student debt having a disproportionate impact on black borrowers, it has also made homeownership even more out of reach for them.
“Who has student debt? The poor, the blacks, the browns,” Fudge told Axios. “We are the most indebted people. And so the system is already skewed so that we are not solvent.”
Student debt relief isn’t the only policy that will help more Americans increase their wallets or opportunities. On Thursday, President Biden announced he would pardon thousands of Americans who have federal convictions for possession of marijuana. He also urged states to follow in his footsteps.
“It’s going to help a lot of people, give them the ability to get into the workforce and not have that belief in over their heads,” Walsh said. “So I think that’s going to allow this opportunity to give people a chance to get a well-paying job.”