TJoe Biden, his summer president, has an opportunity to act in a meaningful way to rebuild America’s middle class, close the gap in racial wealth, and restore faith in the federal government. This is cancelling student debts up to $50,000. The promise of equal access for all students would be realized if student debt was cancelled.
About 7.5 Million Black borrowers are in student debt. This is approximately 30.2 Percent of Black households. This burden would be completely eliminated if student debt was cancelled up to $50,000. Latino families have a better story: debt relief of this magnitude would completely eliminate student debt for 81% of Latino borrowers (or 4.3 million).
Debt relief is the only just and moral response to the nation’s student debt crisis, directly combating the enormous economic challenges faced by working people. It would ensure that the vast majority of the country’s 45 million borrowers are debt-free, and address the consequences of decades of mismanagement and abuse that drove a generation to shoulder the burden of college tuition themselves, undermining, in the process, their faith in American higher education as an engine of economic mobility.
And canceling student debt is not only smart policy—it’s smart politics. By simply pleading, the President can establish his reputation as a champion for workers. This action can be framed by the White House as both a response to the pandemic, and an historic attempt to rebuild America’s middle class from scratch.
Equity would be improved across all sectors of the American economy. According to the Roosevelt Institute, universal debt cancellation of up to $50,000 could be disproportionately beneficial to low-income borrowers. Students from more wealthy families tend to not use student loans to finance college.
Generations ago, people believed that having educated citizens was beneficial for society. The majority of college tuition was paid by taxpayers. The average tuition cost at American universities and colleges has increased sharply over the past 20 years. A study found that the average annual cost of in-state tuition for the best public universities rose by 21% between 2002-2022. However, tuition at private colleges and out-of state tuition can cost up to three times as much.
A college degree is the best option for anyone looking to join or remain in the middle-class, even with rising costs. So it’s no surprise that more than 45 million Americans currently hold $1.6 trillion in federal student debt, with an average debt of $28,950. Over 21 percent of American households suffer from this debt, which often becomes a problem as they are forced into delaying buying houses and having children. It’s perverse: The cost of the ticket into the middle class is stopping people from achieving the economic security that is the hallmark of that same middle class.
Members of my union, American Federation of Teachers, learned that students are at risk due to a complex debt relief scheme. This relies heavily on student loans and lots of paperwork. Biden correctly removed red tape from the student loan process, promising to completely automate cancellation of debt for federal employees, military borrowers, and borrowers with disabilities. This model is also a good example for broad cancellation.
For tens to millions of Americans, cancelling student loans would provide a huge financial boost. More than that, though, it would be a way for the president to accomplish the core of his agenda—building back the middle class, closing the racial wealth gap, and restoring the faith and confidence that the higher education system is there to serve the common good.
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