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Debt cancellation is a start, but only a start (opinion)

The unique American experiment since the 1980s of viewing college as primarily benefiting graduates and passing on rising spending to students and families has been a costly failure, Public Agenda recently said–USA today polls suggest.

The Biden administration’s move on Wednesday to address college debt funding issues by forgiving up to $10,000 in student loan debt for borrowers earning less than $125,000 and up to $20,000 for people who had received federal Pell grants to attend college, points to the consequences of decades of misguided policies.

Tuition fees have nearly tripled since 1980, after adjusting for inflation, which has put college out of reach for many, especially when you factor in wealth inequality due to practices such as redlining which made it difficult to build up savings. Not to mention that the wages of black and brown Americans are unequal and unfair, making it more difficult to repay college loans.

The Biden administration estimates that 20 million borrowers could see their entire remaining balance forgiven if all borrowers claim the relief to which they are entitled. But Wednesday’s highly anticipated announcement responds to just one symptom of the skepticism about the return on investment that has contributed to the sharp decline in college enrollment.

Colleges need to make a stronger case for the value of higher education. This case study should begin by recognizing gaps and committing to providing education and training that prepares people for meaningful work and community involvement.

The country needs more college-educated adults to prepare for the future. To help the nation achieve this, colleges must provide affordable pathways that deliver tangible benefits to individuals and society. Without dramatic action, new student debt will start piling up immediately.

Many Americans no longer seem willing to acknowledge that everyone benefits when more people go to college. The nation has abandoned its commitment to higher education as a public good conferring personal benefits. By default, elected officials and college leaders have allowed tuition to skyrocket, severely hurting today’s students, many of whom are employed, have family responsibilities, and are racially and diversely diverse. ethnic. These students were told to aspire and borrow to get ahead.

Today, nearly 45 million adults pay federal student loans totaling more than $1.6 trillion. More than six in 10 Americans graduating from public and private nonprofit universities in 2019 took out student loans, owing an average of $28,950. Two-thirds of people who default on their loans owe less than $10,000, and many have not completed their education.

Students who are the first in their family to attend college, have served in the military, or have children are at higher risk of dropping out. Black women spend more of their income on repayment than anyone else, and 12 years after starting college, the typical black borrower who first enrolled in 2003-04 owed more than the amount of the original loan.

All of this affects how people perceive their college experience. About two-thirds of Americans told Public Agenda–USA today colleges are stuck in the past and not meeting the needs of today’s students. Nearly six in seven adults among the 1,662 who responded to the May 2022 poll also said college expenses made it difficult for people from low-income families. And around 60% agreed that getting a college degree was ‘too long and expensive for working adults’.

By his actions this week, President Biden fulfilled a campaign promise. In doing so, he satisfies very little. The cancellation of a slice of debt among the lowest income borrowers scratches the surface of all that is wrong with higher education.

You will hear that loan forgiveness is a unique gift to taxpayers. You’ll hear that capping loan forgiveness at $10,000 (or $20,000 for Pell recipients) and applying an income test doesn’t go far enough. Other steps the administration is taking — including making it easier to write off public service loans, eliminating debt for students defrauded by for-profit colleges, and getting back to defaulting borrowers — are all steps in the right direction from Biden.

Yet these measures do not make education affordable.

Nor do they address how education and training can position people for better lives and good jobs.

For these reasons, some criticism is warranted.

But making higher education affordable that helps people live better lives, improves communities and boosts the economy is a bigger challenge than the president alone can tackle.

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