According to Brookings, the wealthiest 20% of households hold a third of student debt while the poorest 20% of households hold 8%.
Universal student debt cancellation, which would forgive student loan debt regardless of income and wealth levels, would cancel a higher dollar amount of debt for the rich than for the poor.
The poor stand to receive more relative relief from student debt cancellation given their lower incomes. The Education Data Initiative reported in May that the bottom 25% of earners, who make $32,048 or less, have an average debt of $30,575—95% of their yearly income. In comparison, the top 1%, who make at least $373,894 annually, have an average debt of $40,550—10% of their income.
The Biden administration, which is working on a student debt cancellation plan, has suggested it would exclude those earning more than $125,000 per year. While some proponents argue this would avoid using tax dollars for those who don't need it, others maintain that it would create a complicated bureaucratic process that would make it harder for poor people to receive financial relief.