Biden administration must cancel student loan debt
Just a few lessons before his baccalaureate, my mother made an impossible choice: to continue or to quit university. Faced with medical issues, mental illness and the stress of parenting seven children while homeless, she struggled – her grades suffered and she dropped out of college. When students do not complete their studies, their student loans cannot be canceled or canceled, and within six months of leaving school, the first bill arrives. With thousands of dollars in student debt and accrued interest, my mom couldn’t go back to school. While a college degree could have lifted my family out of poverty before our conditions got out of hand, the cost of his incomplete education made it worse.
I applied to college to reshape the path of my life and graduated from the University of Massachusetts Amherst in 2020. Like my mother, I accumulated nearly $ 40,000 in debt, as evidenced by the student loan bill hanging on my bedroom wall. A better future offered by higher education is marked with an asterisk – debt that hinders social mobility and prevents many college graduates from buying homes, getting married, and even having children.
While an education has often been described as a great equalizer, the high cost of a college degree reflects a growing contradiction. Systematic funding of public higher education at the state and federal levels fuels the exclusivity and unaffordability of the âpublic optionâ. The hyper-competitive nature and heavy administrative burden associated with college enrollment distracts many students from low-income communities while the high sticker price of many public and private colleges restricts door-to-door access to these same populations. The university prize discourages poor and working-class candidates while threatening those who witness growing debt.
In 2021, the student loan debt crisis reached $ 1.7 trillion and affects an estimated 42 million borrowers. Much of this debt is held by students from low-income families. According to a Demos study, 84 percent of recipients of Pell scholarships at public institutions graduate with student debt, compared to 46 percent of those who are not eligible for the Pell program. Additionally, black student borrowers incur disproportionately in debt to attend college and, upon graduation, default at rates five times higher than white students. According to research conducted at Columbia University, the higher default rate can be partly attributed to for-profit college attendance and the historic racial wealth gap.
Subsequently, the burden of student debt acts as a barrier to individual participation in the economy. Many borrowers are less able to buy a home, start a business, and save for their future. Households without student debt “have considerably more retirement assets and liquidity than households with student debt,” according to the Demos study. Some borrowers even default on their loans if they are unable to pay them, which affects their credit rating and ability to rent an apartment. or take out loans in other fields. Those who are struggling to complete college are faced with the burden of student debt without a degree. Like my mother, they are required to pay them back without benefiting from the higher salary a bachelor’s degree typically confers – college graduates typically earn $ 1 million more over the course of their careers than those without a degree. .
These intersecting issues require immediate intervention to reduce the economic burden of higher education and promote generational equity: full student loan debt cancellation and college investment.
Some oppose the total cancellation of student debt, arguing that the cancellation of student debt would be a “boost to the better off.” While debt cancellation will inevitably benefit a small proportion of affluent households, it will primarily lift up the poor, working-class and black communities most affected by the crisis. Additionally, it would have broader societal benefits by increasing the opportunities for an entire generation to invest in entrepreneurship, retirement accounts and generational wealth through home ownership.
The Biden administration has the power, at this time, to write off all student debt held by the federal government by order in council. While 92% of cumulative student debt is held by the federal government, Biden suggested he would only support $ 10,000 in student debt relief. Instead, members of Congress argued for forgiveness of the $ 50,000 debt, which would wipe out the debt of 80% of all borrowers.
With student loan repayments set to resume in October following the extension of the pandemic moratorium by the Biden administration, the president has the unique opportunity to go beyond another extension. By canceling all federal student loan debt, it will free borrowers from their debt penalty – keeping the promise offered by education and creating avenues of social mobility for those who need it most. chance to make the American dream come true.
TimothÃ©e Scalona is a first year law student at Suffolk Law.