Unfair is Biden Not Cancelling $50,000 of Student Debt
Given the association between holding a college degree and increased earnings over one’s lifetime, it is not surprising that over 40 million people have taken out student loans to invest in their future. Yet, failings of the American student loan system have resulted in a system of borrowing where the process of getting a loan is easier than paying it back. Loan repayment for Black graduates is especially difficult given the pay inequities experienced by Black college graduates who, on average, earn salaries similar to White high school graduates. As a result, Black college graduates do not earn enough to repay loans at a rate similar to that of White college graduates. If we are unwilling to debate the economic disparities and pay inequities between Black and White college graduates, why are we willing to debate the “fairness” of student debt cancellation?
We continue to tell Black students the path to the middle class is through higher education. Yet, the cost to attend has become too high. Unlike public K-12 education, public higher education comes with a price tag that makes it a luxury low and moderate-income families cannot afford. Although these families would benefit the most economically from accessing public higher education, high costs keep them from enrolling. And for those who do enroll, a lack of financial resources, more often than not, pushes them out before completion. Simply put, institutions of public higher education are not serving the public, and politics is part of the problem.
President Biden has unveiled the American Families Plan, which address some long overdue economic and educational needs for future college students. And while his press release acknowledges the mounting evidence that “suggests 12 years of school is no longer sufficient to prepare our students for success in today’s economy,” the plan leaves questions about borrowers’ rising debt unaddressed. The released plan fails to point out how decades long failures have allowed tuition prices at public institutions to rise so high that students must now bear at least half the cost. Also, left unsaid is how the mounting cost of higher education has led to a national crisis of student loan debt.
Paths paved for student debt cancellation make it clear President Biden can use executive action to cancel at least $50,000 of student loan debt for federal loan holders without that amount counting as income in the next tax year. Biden’s inaction to date is a result of his biased belief that debt cancellation exceeding $10,000 will also benefit the wealthy. Rather than a decision based on logic, Biden has made a decision based on his perceptions about Ivy League graduates and the erroneous assumption that higher earning borrowers are all wealthy. However, the truth is wealthy students attending selective and Ivy League institutions tend to pay out of pocket. In addition, Ivy League colleges tend to offer students from lower income households full scholarships leaving only about 2% utilizing state and federal aid programs.
Political leaders cannot make decisions based on feelings and biased beliefs. And yet, the lack of action on student debt cancellation and making community college free is based on biased beliefs about who is worthy to receive loan forgiveness and access free community college. In their quest to prevent the wealthy from benefiting, they are denying equitable access to debt forgiveness and college affordability to those who need it the most. Research has shown that those most negatively impacted by student loans are Black student borrowers from low to moderate-income households. Most Black undergraduates begin their education at a community college. And data shows Black students who earn both associate and bachelor degrees borrow more money than other students do and take longer than all other students take to repay their loans. Even when these graduates earn high incomes, they may default on loans due to a lack of familial wealth in combination with high student loan payments.
So while President Biden and others may see $50,000 for debt cancellation as something that will benefit the wealthy, the truth is without it we leave overburdened Black students and graduates in distress. We also leave in place a system that overwhelmingly benefits wealthy families. And that is simply not fair.