On Wednesday, President Biden announced his plan to cancel $10,000 in student loan debt for borrowers making $125,000 or less annually (White House Briefing). An additional $10,000 for Pell Grant recipients will be forgiven, and the student loan repayment pause for all borrowers received a final extension until December 31. Though significantly less than the $50,000 debt forgiveness or total cancellation of student debt that progressive Democratic lawmakers and activists have rallied for, Biden’s debt forgiveness removes a significant financial burden that stifles the upward mobility promised with higher education.
Pursuing a college degree was meant to pull people out of poverty into a spot in the middle class by opening up better opportunities not widely afforded to those without formal education in low-income households. It was praised as a “great equalizer” that helped level the playing, yet it requires students to buy in to even participate.
The total cost of four-year public and private colleges has nearly tripled since 1980 (College Board, White House Briefing). Previously, financial aid like Pell Grants covered almost 80% of the cost for students from working-class families (Center on Budget and Policy Priorities). Today, it only covers a third, forcing many to take out student loans to pursue a degree.
• Join the Debt Collective’s student debt strike.
• Sign the petition urging the Biden administration to cancel all student loan debt.
• Consider how this student loan forgiveness affects you. It might not apply to you directly, but how will it support other people in your community (colleagues, neighbors, etc)?
More than 40 million borrowers collectively owe over $1.7 trillion in student loan debt in the U.S. (Education Data). On average, a person takes 20 years to repay their student loan debt (Education Data). These debts have contributed to a majority of millennials being unable to buy a home because the debt either disqualified them or made it impossible to afford a mortgage.
Student loan debt isn’t equally distributed, with people of color more likely to be at a disadvantage. A 2016 analysis found that more than 90% of African American and 72% of Latine students take out loans to attend college, compared to 66% of white students. Asian-American students who need to borrow more than $30,000 were more likely to rely on private student loans that offer fewer consumer protections (Consumer Financial Protection Bureau). Just four years after graduation, 48% of Black student borrowers owe more than they initially borrowed, compared to 17% of white borrowers. Part of the disparity is due to racial barriers to access that impede people of color’s ability to build wealth and upward mobility, including starting with lower levels of family income, wealth, and parental education (Brookings).
Receiving a degree isn’t real equity if it means saddling people with debt for pursuing a better future. This is especially true considering how embedded higher education is in American society, with an immediate trajectory expected post-high school graduation. Having a degree is often a minimum requirement for jobs, even in fields that previously did not require one or necessarily need one (Harvard Business School). Of the 11.6 million jobs created after the Great Recession, 99% went to people with at least some college education (Education Week). In 2010, 62% of recent college graduates were working in jobs requiring a degree, despite only 27% working a position that even relates to their major (Federal Reserve Bank of New York). The shift is partly due to “employers defaulting to using college degrees as a proxy for a candidate’s range and depth of skills.”
Still, having a degree doesn’t guarantee a job since young graduates are often passed over during the hiring process for lack of experience (EPI). It doesn’t prevent you from needing a second job or mean you will be able to afford a home (Marketwatch). And for Black and Brown people, having a degree doesn’t close the racial wealth gap. Instead, it widens it when factoring in student loan debt (FiveThirtyEight).
While Biden’s plan addresses the burden of student loan debt, it fails to acknowledge the exorbitant cost of college that buries millions into the “mountain of debt” he hopes to pull borrowers out of in the first place. If having a degree continues to be a prerequisite for getting a job, affording shelter, and acquiring the basic necessities, then it must be more accessible. Student loan forgiveness is a start, but a return to tuition-free public colleges needs to be the basis for reforming the education system.
Higher education is priced like a luxury but sold as a necessity. And the myth of it being this golden ticket to better opportunities, high-paying job prospects, and being able to take care of family and access a future not entrenched in poverty has unraveled with the dependence on student loans. A better future shouldn’t mean financial hardship, yet student loans disempower people, especially people of color, from being more active in their future.
• Higher education is not a “great equalizer.”
• Student loan debt disproportionately affects people of color.
• College degrees are becoming a minimum requirement in the U.S. workforce.