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      The lesson from Joe Biden’s student loan forgiveness? Go big or go home | Hamilton Nolan

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      The lesson from Joe Biden’s student loan forgiveness? Go big or go homeHamilton NolanBiden will get backlash from Republicans whether he does a little or a lot – so you might as well do a lot Politics is not like regular life; it’s worse. Things that are held as treasured virtues in the normal world are often political liabilities. We’ve all just been served with a shining example of how reflexive moderation – which is good when estimating measurements for recipes, or having drinks at a work party – becomes the tendency of a political fool. The wellbeing of countless Americans has long been sacrificed on the altar of moderation by the Democratic party, and all the Democrats win for it is maximal disgust.Share your views on Biden’s student loan forgiveness policy for millionsRead moreThis week Joe Biden announced that he will be canceling $10,000 in federal student loan debt (or $20,000 for Pell grant recipients) for people who earn under $125,000 a year. This policy is both unquestionably wise, and unquestionably a half-measure. There has long been a movement on the left to cancel all student debt, and even Democratic stalwarts like Chuck Schumer and Elizabeth Warren were pushing for the cancellation of $50,000 in debt. Joe Biden was pulled towards this action, in large part, by his inability to get other, bigger economic policies through Congress. But even in taking unilateral action, he has succumbed to the overwhelming tendency of Clintonian Democrats to cut any good policy idea in half and call it political wisdom.And what did Biden earn for his unforced, personal decision to keep this program much smaller than it could have been? Within a day, mainstream Republican pundits and politicians called the policy an executive “coup”, “an abuse of the law”, “utterly revolting”, and a “fuck you to every financially responsible person”. Republicans in Congress screeched that it would cause wild and uncontrolled borrowing, and Mitch McConnell, predictably, called it “socialism”.In other words, Republicans – whose party has spent the past 50 years single-mindedly crushing worker power and funneling all of our nation’s proceeds to the rich – suddenly became very concerned that this policy might be regressive in its benefits. The party that prevented the passage of any broader measures that might have relieved not just student debt, but housing and healthcare costs and poverty wages, is now alarmed that this policy does not address all of those other matters. Republicans have taken one day off of trying to eradicate labor unions and destroy public education and put poor people in jail to theatrically moan about how this is unfair to all of the hardworking folks who didn’t go to college. Whatever.Here is the very simple lesson to take from this episode: you will get all of the backlash whether you do a little, or a lot. So do a lot. What is this loan forgiveness policy really driving at? It is, at its core, one small step on the road to a world in which America has free, high-quality, public higher education for all. We are not dreaming of a world in which student loan debt is somewhat smaller, but rather a world in which student loan debt does not need to exist. That is the goal we should reach. When, after many years of struggle, we get a chance to take a step down that road, make it a big step. To do otherwise is stupid. By slashing the debt relief number far down from what it could have been, Biden is acting like a man who is forced to rush into a burning building to save two kittens, and decides to break it up into two trips so his arms don’t get tired. Hey, buddy: let’s just get this thing done all at once.Incredibly, this basic truth of how politics works seems to forever elude Democrats. The issue of healthcare is an obvious parallel here. Free public healthcare – Medicare for all – is the intuitive, compassionate and eminently achievable goal that all of our peers in the wealthy western world have already built. So naturally, that goal is considered a fringe position in the Democratic party. Instead, Democrats have spent decades in the excruciating process of building and defending Obamacare, an insufficient half-measure that has cost the same amount of political capital and prompted the same amount of political opposition that Medicare for all would have, while leaving in place most of the ruinous flaws of our broken system. This resolute determination to never propose full solutions to our problems is proudly embraced by Democratic leadership and packaged into campaign ads as “reasonableness” and “moderation”.Of all of the perversities in American politics, the most frustrating is its conviction that idealism is a weakness. The conflation of defeatism with wisdom means that expressing the belief that we should just do what needs to be done in order to make the world a just place is enough to convince the political world that the speaker is a rube. This is ironic, because the very opposite is true, as anyone who has ever accomplished something ambitious can tell you. There is nothing more foolish than negotiating against yourself. That woeful quality has long been the hallmark of Democrats, who are like timid children who long to express themselves but are too scared to ever stray from the tepid crowd.What do we need? Public ownership of public goods for the public benefit. Public education, public healthcare, public transportation, public art. We are all the public, and helping the public is good. That’s called socialism, folks. Republicans will accuse the Democrats of it no matter what. Might as well stop shuffling along, and get right to it.
      Hamilton Nolan is a writer based in New York
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      Biden says his student loan relief is ‘life-changing’. Will it fix the system’s inequities?

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      Biden says his student loan relief is ‘life-changing’. Will it fix the system’s inequities?The initiative’s income cap and unclear bureaucratic process could fail to address the racial disparities that already exist01:15As Joe Biden announced the details of his plan to help those with student loan debt, Kat Welbeck wrestled with the idea. For millions of Americans, the unprecedented relief would be “life-changing”, especially for low-income and Black and Latino Americans, who are disproportionately saddled with decades-long debt, she said.But the plans’ income cap on who can receive cancellation, and its unclear bureaucratic process for Americans seeking debt relief could perpetuate the inequities that underpin the nation’s student loan system, Welbeck, director of advocacy and civil rights counsel for the Student Borrower Protection Center, said.Student loan forgiveness: what you need to know about Biden’s planRead more“While a $10,000 cancellation is so meaningful for millions of student loan borrowers, there’s a lot that’s still to be done to fix this student debt crisis,” Welbeck says.On Wednesday, the White House released its long-anticipated plan on how to tackle the nation’s mounting $1.6tn student loan debt, accounting for more than 43 million people, with almost a third owing less than $10,000, according to federal data.The initiative would cancel up to $10,000 in debt for borrowers who earn less than $125,000 a year ($250,000 for married couples). Borrowers whose low income level qualified them for a Pell Grant will receive up to $20,000 in relief. The White House also extended a pause for “one final time” on student loan payments through January.The White House has projected that the plan would eliminate full debt balances for 20 million Americans and that 90% of debt relief dollars would go toward people with incomes less than $75,000. The White House also touted it as an effort to “advance racial equity”, pointing to its targeted relief for those who received Pell Grants. Officials noted that Black Americans were twice as likely to receive such grants as white Americans.Senator Elizabeth Warren, who, like others, have advocated for cancelling at least $50,000 in student debt, praised the administration’s plan as “transformative for the lives of working people all across the country” and would “help narrow the racial wealth gap among borrowers”.Still, some argue that the cancellation of just $10,000 for most borrowers would fail to substantially affect the racial disparities within the student loan system. Black and Latino borrowers disproportionately come from poorer households and, as a result, take on more debt than white Americans. At the same time, white American households have, on average, 10 times the wealth of Black households.Derrick Johnson, president of the NAACP, which had been advocating for cancellation of $50,000, wrote in an op-ed that Biden’s plan would “do little to help” Black Americans who, on average, hold nearly twice as much student debt as white borrowers. “Canceling just $10,000 of debt is like pouring a bucket of ice water on a forest fire,” he said. Canceling $10,000 in student debt when the average white borrower is $12,000 in debt, while Black women hold on average over $52,000 isn’t just unacceptable, it’s structural racism.— Nina Turner (@ninaturner) August 23, 2022
      The emphasis on income in the White House’s cap represents a possible barrier that could exclude borrowers of color who meet the income threshold yet their families lack the wealth to tackle the debt, Welbeck says. A June 2020 report from the Student Borrower Protection Center found that 90% of Black Americans and 72% of Latino Americans took out student loans, a far cry from the 66% of white Americans.And 20 years after graduating college, the median Black borrower still owed 95% of their original debt while the median white borrower paid down the same amount. For Latinos, after 12 years, they owed 83% of their original debt, more than the white borrower over the same time.Given that Black and Latino Americans typically earn less than white Americans, borrowers of color will start from behind without the intergenerational wealth available to reduce the debt they already hold.“So if you’re already coming from a lower-wealth household, you now have more debt, and then that cuts into opportunities for you to build wealth for the next generation,” Welback says. “You might see higher-income households that are Black or Latino, but that does not take away the fact that you still have those wealth disparities.”Student loan forgiveness: what does it mean for the US debt crisis?Read moreHistorically, the education department has complicated access to loan forgiveness through the programs it creates, such as the Public Service Loan Forgiveness program for non-profit and public service workers seeking relief and the borrower defense program for those who were defrauded by predatory for-profit colleges.The White House initiative does nothing to address private student loan debt, which accounts for more than $140bn in debt. Although Latino borrowers were more than twice as likely to report struggling with private student loan debt as white borrowers, Black borrowers were a staggering four times as likely to fall behind on private debt payments, according to the Student Borrower Protection Center.An application process could make it harder for people to access relief, Welbeck says. But recent decisions by the education department to automatically discharge debts for hundreds of thousands of students who attended ITT Technical Institute and Corinthian Colleges, two for-profit college chains that imploded, show that a widespread relief without bureaucratic hurdles is possible. The two debt cancellations at the for-profit institutions amounted to roughly $10bn affecting more than 700,000 students.“The student debt crisis is a result of the longstanding history of racial discrimination that we have in our country, and it continues to perpetuate them,” Welback says. “So until we address student debt as a civil rights crisis, we’re not going to be able to make meaningful gains toward equity.”TopicsUS student debtBiden administrationUS student financeRaceJoe BidenUS politicsUS educationnewsReuse this content More

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      I’m 65 and have $300,000 in student debt. I and other older debtors are going on strike | Lystra Small-Clouden

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      I’m 65 and have $300,000 in student debt. I and other older debtors are going on strikeLystra Small-CloudenWe know that this debt won’t go away – for us or Americans of any age – unless we stand up and fight it On Wednesday, the White House announced its long-awaited debt cancellation plan. Joe Biden will erase $10,000 for borrowers who make under $125,000 a year, and $20,000 for Pell Grant recipients. The federal student loan payment moratorium will also be extended until December 31.Sadly, this news does almost nothing for me and millions of others. It falls far short of what economic and racial justice demands. That’s why I have joined over 250 people, all over age 50, who are pledging to strike our student loans when payments resume. Our numbers are growing every day.Most people think of the student loan crisis as a problem affecting young people. As a 65-year-old woman, however, I am actually among the fastest-growing demographic of student debtors. We know that this debt won’t go away – for us or Americans of any age – unless we stand up and fight it. That’s why we’re prepared to strike.I have over $300,000 in student debt. The burden is negatively affecting my emotional and physical existence. You may wonder how it is possible to accumulate such a large amount of student debt, so let me explain.As a single, Black, immigrant woman, I always told my four kids that education was the most important part of their upbringing. But it didn’t take me long to realize that I was hardly following my own advice: I was not comfortable advising my children to achieve the highest level of education when I myself didn’t. I am a mentor, educator and adviser to my kids. I wanted my mentorship and advice to be built on a strong educational and intellectual foundation.In January 2010 I began a doctoral degree program in human resources management. My biggest mistake was enrolling in a for-profit school. I did achieve my academic goals in August 2016. That feeling of success was short-lived, however. After graduation, I had to begin repaying student loans.My school didn’t play fairly with me while I pursued my doctoral degree. The administrators changed the length of my program from three to six years. They actively steered me away from my research interest in the effects of slavery and globalization, adding more time to my program of study. Meanwhile, I continued to pay. From an initial loan payoff of $75,000 per year, my debt rose to $300,000.Then my children started college. Because of my own debt, I was unable to qualify for parent loans to help my younger two children pay for their undergraduate studies. I was also unable to plan for the future. I exhausted my retirement funds trying to repay these loans and have not been able to replenish them because, as a good citizen, I prioritized repaying my student loans above all else.Biden must cancel all student loan debt, including for those with graduate degrees | Derecka PurnellRead moreMy debt is an economic drain but it’s also an emotional one. I have been stressing over it for 12 years now, and the stress has taken a very real toll on my physical health. I suffer from hypertension and high cholesterol and recently had emergency surgery to remove my gall bladder due to digestive issues caused by unnecessary stress. I spend a lot of time thinking about the fact that I am 65 years old, with projected loan repayments for the next 21 years of my life – meaning I will be 86 when I pay them off. When you are burdened by student debt, there is no quality of personal or work life. You are stuck at home – foregoing vacations, visiting family and friends, professional conferences, everything.Like so many debtors, I’ve found it hard to see a way out. As an older person, I’ve often felt particularly alone as a student debtor. When I learned of the Debt Collective, the nation’s first debtors’ union, I realized I was not alone. I found others with similar stories and experiences, including many other older people. As a group, we understand that we’re stronger together. And we are taking action. If Biden won’t cancel our debt, we will go on strike.I joined the 50-over-50 debt strike to make sure that the world knows that older debtors exist, and that we are growing in number. Because student loans are structured as a debt trap, there are more and more older debtors every day. My fellow strikers and I can’t pay – and won’t. We shouldn’t have to take money from our retirement to pay for college. I accumulated this massive student debt because of the inhumane policies of lending institutions and for-profit schools, and the lack of support and intervention from government agencies. Biden has the power to cancel student debt for all of us, automatically and immediately. Why isn’t he using it?I am pleading with Joe Biden: please make things right – by cancelling all student debt.TopicsUS politicsOpinionJoe BidenBiden administrationDebt reliefUS student debtHigher educationHigher education policycommentReuse this content More

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      Student loan forgiveness: what you need to know about Biden’s plan

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      ExplainerStudent loan forgiveness: what you need to know about Biden’s planWho qualifies and how to apply for the forgiveness plan, and will the student loan payment freeze be extended? President Joe Biden said Wednesday that many Americans can have up to $10,000 in federal student loan debt forgiven. That amount increases to $20,000 if they qualified for Pell grants. Here’s what we know so far and what it means for people with outstanding student loans:Who qualifies for student loan forgiveness? You qualify to have up to $10,000 forgiven if your loan is held by the Department of Education and you make less than $125,000 individually or $250,000 for a family. If you received Pell grants, which are reserved for undergraduates with the most significant financial need, you can have up to $20,000 forgiven. If you are a current borrower and a dependent student, you will be eligible for relief based on your parents’ income, rather than your own.Will the student loan payment freeze be extended?The payment freeze will be extended one last time, until 31 December. The freeze started in 2020 as a way to help people struggling financially during the Covid-19 pandemic and it’s been extended several times since. It was set to expire on 31 August.Interest rates will remain at 0% until repayments start. Under an earlier extension announced in April, people who were behind on payments before the pandemic will automatically be put in good standing.How do I apply for student loan forgiveness?Details of that have not been announced, but keep an eye on the federal student aid website for more details in coming days.What’s a Pell grant and how do I know if I have one?Roughly 27 million borrowers who qualified for Pell grants will be eligible to receive up to $20,000 in forgiveness under the Biden plan.Pell grants are special government scholarships for lower-income Americans, who currently can receive up to $6,895 annually for roughly six years.Pell grants themselves don’t generally have to be paid back, but recipients typically take out additional student loans.“This additional relief for Pell borrowers is also an important piece of racial equity in cancellation,” said Kat Welbeck, Civil Rights Counsel for the Student Borrower Protection Center. “Because student debt exacerbates existing inequities, the racial wealth gap means that students of color, especially those that are Black and Latino, are more likely to come from low-wealth households, have student debt, and borrow in higher quantities.”To find out if you have a Pell grant, check any emails you’ve received that describe your FAFSA award.How many people will this help? About 43 million Americans have federal student debt, with an average balance of $37,667, according to federal data. A third of those owe less than $10,000. Half owe less than $20,000. The total amount of federal student debt is more than $1.6tn.What if I’ve already paid off my student loans – will I see relief? The debt forgiveness is expected to apply only to those currently holding student debt. But if you’ve voluntarily made payments since March 2020, when payments were paused, you can request a refund for those payments, according to the Federal Office of Student Aid. Contact your loan servicer to request a refund.Will student loan forgiveness definitely happen?The White House is expected to face lawsuits over the plan, because Congress has never given the president the explicit authority to cancel debt. We don’t know yet how that might impact the timetable for student loan forgiveness.What repayment plan is the Department of Education proposing? The Department of Education has proposed a repayment plan that would cap monthly payments at no more than 5% of a borrower’s discretionary income, down from 10% now. Borrowers will need to apply for the repayment plan if it’s approved, which could take a year or more.For example, under the proposal, a single borrower making $38,000 a year would pay $31 a month, according a government press release.The amount considered non-discretionary will also be increased, through the department has not said how much.Discretionary income usually refers to what you have left after covering necessities like food and rent, but for student loan repayment purposes it’s calculated using a formula that takes into account the difference between a borrower’s annual income and the federal poverty line, along with family size and geographic location.What if I can’t afford to pay even with loan forgiveness? Once payments resume, borrowers who can’t pay risk delinquency and eventually default. That can hurt your credit rating and mean you’re not eligible for additional aid.If you’re struggling to pay, check if you qualify for an income-driven repayment plan. You can find out more here.The plan Biden announced on Wednesday also includes a proposal that would allow people with undergraduate loans to cap repayment at 5% of their monthly income. Proposals like this one can take a year or more to be implemented, and it’s not clear what the fine print will be.If you have worked for a government agency or a non-profit organization, you could also be eligible for the Public Service Loan Forgiveness Program, which you can read more about here.TopicsUS student debtUS personal financeUS student financeUS politicsUS income inequalityexplainersReuse this content More

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      Biden unveils plan to cancel $10,000 in student loan debt for millions

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      Biden unveils plan to cancel $10,000 in student loan debt for millionsPresident delivers on campaign promise and outlines debt relief measures for those on lower incomes in White House speech01:15Millions of Americans received welcome news on Wednesday when Joe Biden delivered on a campaign promise to provide $10,000 in student debt forgiveness.Borrowers who earn less than $125,000 a year will be eligible for loan forgiveness, with those whose low incomes qualified them for federal Pell Grants receiving up to $20,000 in relief. About a third of US undergraduate students receive Pell Grants.Biden also extended a pause on federal student loan payments through the end of the year. The White House said it would be the last pause, and borrowers should expect to resume payments in January.If it survives probable legal challenges, Biden’s plan could offer a windfall to many Americans in the run-up to midterm elections in November. More than 45 million owe a combined $1.7tn in federal student debt. Almost a third owe less than $10,000, according to federal data.Biden also proposed a new income-driven repayment plan that would cap loans for low-income future borrowers and introduce fixes to the loan forgiveness program for non-profit and government workers.“Twelve years of universal education is not enough,” Biden said, announcing the plan at the White House. “How do we remain the most competitive nation in the world with the strongest economy in the world with the greatest opportunities?“That’s what today’s announcement is about. It’s about opportunity. It’s about giving people a fair shot. It’s about the one word America can be defined by: ‘possibilities’. It’s about providing possibilities.Biden noted that the federal government gave loans to small businesses during the Covid pandemic.“Now, it’s time to address the burden of student debt the same way.”Biden added that “an entire generation is now saddled with unsustainable debt.“The burden is so heavy that even if you graduate, you may not have access to the middle-class life that the college degree once provided. The burden is especially heavy on Black and Hispanic borrowers who, on average, have less family wealth to pay for it.”Biden said more information on the plan would soon be released and borrowers who qualify for forgiveness could expect a “short and simple form to apply for this relief”, sent by the Department of Education.The US has a long history of student debt, the vast majority owed to the federal government, which has been offering loans for college since 1958. US student debt has more than tripled over the last 16 years.Senior Democrats on Capitol Hill cheered Biden’s announcement. The Senate majority leader, Chuck Schumer, and the Massachusetts senator Elizabeth Warren, a longtime advocate of the policy, issued a joint statement.They said: “With the flick of a pen, President Biden has taken a giant step forward in addressing the student debt crisis by cancelling significant amounts of student debt for millions of borrowers.“The positive impacts of this move will be felt by families across the country, particularly in minority communities, and is the single most effective action that the president can take on his own to help working families and the economy.”The senators added that Democrats would continue with efforts “to help close the racial wealth gap for borrowers and keep our economy growing”.Biden has faced pressure from liberals to provide broader relief. The cancellation falls short of the $50,000 many activist groups wanted. Some groups have called for full student debt cancellation.“If we can cancel $10k, we can cancel it all,” the Debt Collective, a union of debtors, tweeted on Wednesday.Administration officials claimed the plan could reduce inflation. The top Senate Republican, Mitch McConnell, argued that it would worsen the problem.McConnell said: “Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our armed forces in order to avoid taking on debt. This policy is astonishingly unfair.”Biden’s continuation of the pandemic loan payment freeze came just days before millions were set to find out when their next student loan bills were due. The end of the payment freeze extension was set for 31 August.During the 2020 presidential campaign, Biden was initially skeptical of student debt cancellation as he faced progressive candidates including Warren and Bernie Sanders, the democratic socialist senator from Vermont.On Wednesday, Sanders hailed “a great step forward” but said: “We have got to do more.”New York special election victory gives Democrats hope for midterms – liveRead moreAs he tried to shore up support among younger voters, Biden unveiled a proposal for debt cancellation of $10,000 per borrower, with no mention of an income cap. That campaign promise was narrowed in recent months by embracing the income limit.Democrats pushed the administration to go as broad as possible, seeing debt relief as a galvanizing issue, particularly for Black and young voters.‘There’s been a dramatic shift in how Americans think about the role of government in helping people out for college,” said Brian Powell, professor of sociology at Indiana University Bloomington who co-authored a book on the student loan crisis.Powell noted that support for debt cancellation and college affordability has grown. Those who go to college make on average $30,000 more a year than those with just a high school degree.TopicsUS student debtJoe BidenUS politicsUS educationUS domestic policynewsReuse this content More

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      Student loan forgiveness: what does it mean for the US debt crisis?

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      ExplainerStudent loan forgiveness: what does it mean for the US debt crisis? The $1.7tn debt has become a hot political issues as midterm elections approachAmerica’s students have a debt problem. A big one. More than 45 million Americans – more than the population of California – now owe a collective $1.7tn in student debt.The vast majority of the money is owed to the federal government, which has been backing or directly offering student loans for higher education since 1958. While student loans are not new in the United States, the amount of student debt has more than tripled over the last 16 years.For the first time in history, the federal government will cancel a large swath of student debt to address the crisis. On Wednesday, Joe Biden announced borrowers who make less than $125,000 a year will see $10,000 shaved off their debt. Most borrowers will qualify for some cancellation. For at least 15 million, that means complete erasure of their debt.Student debt will remain a hot political issue. Understanding the impact of such a dramatic policy requires unpacking the student debt crisis, beginning with its origins.How the student debt crisis startedIn 1957 the Soviet Union successfully launching the first earth-orbiting satellite, Sputnik. With the cold war raging the federal government feared the US education system was failing to produce enough scientists and engineers to compete with the Soviets and, in 1958, started handing out student loans through the National Defense Education Act.Nearly a decade later, the Higher Education Act of 1965 allowed more people to take out loans as the federal government promised to pay back banks for any loans that were not repaid.“It all started from this choice, which I think was a terrible choice, to decide that as a policy matter we should support higher education … by giving [students] an opportunity to get a loan,” said Dalié Jimenez, professor of law and director of the Student Loan Law Initiative at the University of California at Irvine. “It was just a terrible mistake.”Starting in 2010, the federal government started directly lending money to student borrowers. In the wake of the Great Recession, the amount of student debt began to increase rapidly. Colleges were seeing increased enrollment as people left the workforce to go back to school. States slashed their higher education budgets, leading to higher tuition. More students were turning to for-profit colleges, which tend to be more expensive than public colleges.Over the last few years, the amount of grant aid, which does not need to be paid back, has risen. Yet despite this appearance of more financial support for students to attend college, the cost of attendance has remained the same.Two line charts comparing the gap between the listed price and what it actually costs to attend public and non-profit private institutions.The cost of attending public college has actually increased at a higher rate than the cost to attend a private college. The net cost of attendance for four-year public colleges, which takes into account any grants students receive, went from $17,500 in 2006 to $20,210 in 2016, according to data from College Board.Line chart of the costs of public and private non-profit increasing and then slightly decreasing from 2006-07 to 2020-21 school years.“That era 10 years ago was a really formative moment for producing a lot of debt that’s still out there,” said Kevin Miller, associate director for higher education at the Bipartisan Policy Center’s Economic Policy Project. “The cost of college attendance has gone up a lot while household incomes in the United States haven’t … there’s a real sense that if grant, state or institutional aid isn’t filling the gap, that just leaves debt as the only option.”What student debt looks like todayFor the 2021-2022 school year, the average cost of tuition and fees for a four-year public college is $10,740. The cost is nearly quadrupled for private institutions, at an average of $38,070. Even with grant aid, the cost of attendance is an average of $19,230 for public institutions and $32,720 at private schools.Estimates put the average debt of those in the class of 2019 who took out student loans at $28,950. The number is close to the maximum $31,000 that students who are dependents of parents or guardians can borrow from the federal government to fund undergraduate education.Area chart of student debt increasing from Q1 2006 to Q1 2022.Continuing racial wealth disparities are reflected in who has to take out loans to fund college. About half of Black college students take out student loans, compared with 40% of white students. Black Americans owe an average of $25,000 more in debt than their white counterparts and are more likely to be behind on their payments.Despite the amount of debt many students need to take on to attend college, nearly 20 million Americans still enroll in college every year. While earnings can depend on a person’s industry, those with a bachelor’s degrees earn 75% more in their lifetime than those with just a high school diploma.“The message is you have to get a college degree. It’s not just a rhetorical message, it’s an actual truth that if you don’t have a college degree, particularly if you are Black or brown … you will not be able to get a job that is better than your parents’,” Jimenez said.Those with graduate and professional degrees earn even more, but the price for an advanced degree is even higher. A good chunk of student debt – about 40% – is held by those who took out loans to pay for graduate school.What the government has done to address student debtAfter over a year of deliberation, the White House announced on Wednesday the largest student debt cancellation in US history. Federal borrowers making under $125,000 will see $10,000 of their debt forgiven. The policy represents a fulfillment of a promise Biden made on the campaign trail to cancel $10,000 of student debt.Until Wednesday, the most substantial policy addressing student debt was first implemented by the Trump administration, which paused student loan payments and interest accrual at the beginning of the Covid-19 pandemic. Both Trump and Biden extended the pause over the last two years, and it is now set to expire on 31 August.Since the beginning of this year, Biden has announced a slate of additional policies alongside the pause extension. Those who have defaulted or are delinquent on their federal student loans will be returned to good standing. Biden forgave $415m in student debt for borrowers who attended predatory for-profit schools.His administration also announced changes to the Public Service Loan Forgiveness Program, which forgives the student loans of borrowers who are non-profit and government employees after 10 years of debt or after 120 payments are made. Over 113,000 borrowers with a cumulative $6.8bn in debt are now eligible for forgiveness. Over the years, the program has been under much criticism, as relief through the program was rare and borrowers were often deemed not qualified for logistical reasons.The debate over debt forgivenessRepublicans have been using student debt as a talking point against Biden as the midterm elections approach.Senator Mitt Romney suggested that Democrats canceling student loans is a way of bribing voters. “Other bribe suggestions: Forgive auto loans? Forgive credit card debt? Forgive mortgages?” he wrote on Twitter. JD Vance (who went to Yale Law School) told the Washington Post that “Biden essentially wants blue-collar workers like truck drivers – who didn’t have the luxury of going to college to get drunk for four years – to bail out a bunch of upper-middle-class kids.”The reality is that the student loans of those in the highest income quartile – people making more than $97,000 – do make up a third of all outstanding student debt. But many low-income Americans also have student debt, though the amount of debt they have is smaller. Those making below $27,000 a year make up 17% of all borrowers, but their loans comprise 12% of all the outstanding debt.An income threshold could be a way for the government to target forgiveness to those who need it most. But some have pointed out that an income ceiling does not take into consideration a person’s wealth.“You’re looking at a snapshot of what your income was this year or last year, that tells you very little,” Jimenez said. “If your family has no wealth, you’re very differently situated from someone who has family wealth or personal wealth from previous careers.”Those who have been advocating for student debt cancellation say that $10,000 in forgiveness will not be enough to address the breadth of the crisis. Democratic lawmakers, including Senate majority leader Chuck Schumer, Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez, have called on Biden to cancel up to $50,000.“I don’t believe in a cutoff, especially for so many of the frontline workers who are drowning in debt and would likely be excluded from relief,” Ocasio-Cortez told the Washington Post. “Canceling $50,000 in debt is where you really make a dent in inequality and the racial gap. $10,000 isn’t.”Ending the student debt crisis for goodEven though millions will now see debt cancellation, future college students will continue to take out loans – and at higher interest rates. Tackling the price tag of college will come with its own complications, but advocates say it will be necessary to ensure student debt does not get worse.While Biden’s plan for free community college was killed along with the rest of the social and climate spending bill that was making its way through Congress, some efforts for better college funding are happening at the local level.In March, the governor of New Mexico signed a bill that would use $75m in state funds to cover tuition and fees for undergraduate students at two- and four-year colleges. Drives for similar government support have been seen in Pennsylvania, California and Maine.“The cost of college is too high for a lot of students to manage without debt. Making it so that students can go without debt or take less debt in the first place is the thing that we really need to be focusing on,” Miller said. “What about the next generation or the one after that?”
      This article was amended. An earlier version stated that student debt had doubled over 16 years. In fact, it has more than tripled.
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      How the US student loan debt crisis started — and how it could end

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      How the US student loan debt crisis started — and how it could end The $1.8tn debt has become a hot political issues as midterm elections approachAmerica’s students have a debt problem. A big one. More than 45 million Americans – more than the population of California – now owe a collective $1.7tn in student debt.What to do about that debt has become a hot political issues as midterm elections approach.The vast majority of the money is owed to the federal government, which has been backing or directly offering student loans for higher education since 1958. While student loans are not new in the United States, the amount of student debt has more than tripled over the last 16 years.The Biden administration has recently hinted that some form of student debt forgiveness could be announced soon – specifically, canceling at least $10,000 in student debt for Americans earning less than $125,000 a year. With that threshold, most student loan borrowers will qualify for some debt forgiveness.If the executive action is undertaken, it will be the first large debt cancellation by the federal government to address the student debt crisis. Understanding the impact of such a dramatic policy requires unpacking the student debt crisis, beginning with its origins.How the student debt crisis startedIn 1957 the Soviet Union successfully launching the first earth-orbiting satellite, Sputnik. With the cold war raging the federal government feared the US education system was failing to produce enough scientists and engineers to compete with the Soviets and, in 1958, started handing out student loans through the National Defense Education Act.Nearly a decade later, the Higher Education Act of 1965 allowed more people to take out loans as the federal government promised to pay back banks for any loans that were not repaid.“It all started from this choice, which I think was a terrible choice, to decide that as a policy matter we should support higher education … by giving [students] an opportunity to get a loan,” said Dalié Jimenez, professor of law and director of the Student Loan Law Initiative at the University of California at Irvine. “It was just a terrible mistake.”Starting in 2010, the federal government started directly lending money to student borrowers. In the wake of the Great Recession, the amount of student debt began to increase rapidly. Colleges were seeing increased enrollment as people left the workforce to go back to school. States slashed their higher education budgets, leading to higher tuition. More students were turning to for-profit colleges, which tend to be more expensive than public colleges.Over the last few years, the amount of grant aid, which does not need to be paid back, has risen. Yet despite this appearance of more financial support for students to attend college, the cost of attendance has remained the same.Two line charts comparing the gap between the listed price and what it actually costs to attend public and non-profit private institutions.The cost of attending public college has actually increased at a higher rate than the cost to attend a private college. The net cost of attendance for four-year public colleges, which takes into account any grants students receive, went from $17,500 in 2006 to $20,210 in 2016, according to data from College Board.Line chart of the costs of public and private non-profit increasing and then slightly decreasing from 2006-07 to 2020-21 school years.“That era 10 years ago was a really formative moment for producing a lot of debt that’s still out there,” said Kevin Miller, associate director for higher education at the Bipartisan Policy Center’s Economic Policy Project. “The cost of college attendance has gone up a lot while household incomes in the United States haven’t … there’s a real sense that if grant, state or institutional aid isn’t filling the gap, that just leaves debt as the only option.”What student debt looks like todayFor the 2021-2022 school year, the average cost of tuition and fees for a four-year public college is $10,740. The cost is nearly quadrupled for private institutions, at an average of $38,070. Even with grant aid, the cost of attendance is an average of $19,230 for public institutions and $32,720 at private schools.Estimates put the average debt of those in the class of 2019 who took out student loans at $28,950. The number is close to the maximum $31,000 that students who are dependents of parents or guardians can borrow from the federal government to fund undergraduate education.Area chart of student debt increasing from Q1 2006 to Q1 2022.Continuing racial wealth disparities are reflected in who has to take out loans to fund college. About half of Black college students take out student loans, compared with 40% of white students. Black Americans owe an average of $25,000 more in debt than their white counterparts and are more likely to be behind on their payments.Despite the amount of debt many students need to take on to attend college, nearly 20 million Americans still enroll in college every year. While earnings can depend on a person’s industry, those with a bachelor’s degrees earn 75% more in their lifetime than those with just a high school diploma.“The message is you have to get a college degree. It’s not just a rhetorical message, it’s an actual truth that if you don’t have a college degree, particularly if you are Black or brown … you will not be able to get a job that is better than your parents’,” Jimenez said.Those with graduate and professional degrees earn even more, but the price for an advanced degree is even higher. A good chunk of student debt – about 40% – is held by those who took out loans to pay for graduate school.What the government has done to address student debtThe most substantial policy addressing student debt was first implemented by the Trump administration, which paused student loan payments and interest accrual at the beginning of the Covid-19 pandemic. Both Trump and Biden extended the pause over the last two years, and it is now set to expire on 31 August.Since the beginning of this year, Biden has announced a slate of additional policies alongside the pause extension. Those who have defaulted or are delinquent on their federal student loans will be returned to good standing. Biden forgave $415m in student debt for borrowers who attended predatory for-profit schools.His administration also announced changes to the Public Service Loan Forgiveness Program, which forgives the student loans of borrowers who are non-profit and government employees after 10 years of debt or after 120 payments are made. Over 113,000 borrowers with a cumulative $6.8bn in debt are now eligible for forgiveness. Over the years, the program has been under much criticism, as relief through the program was rare and borrowers were often deemed not qualified for logistical reasons.The debate over debt forgivenessEven as it seems Biden is prepared to cancel some debt, the idea has gotten some criticism over the last few months.Republicans have been using student debt as a talking point against Biden as the midterm elections start rolling.Senator Mitt Romney suggested that Democrats canceling student loans is a way of bribing voters. “Other bribe suggestions: Forgive auto loans? Forgive credit card debt? Forgive mortgages?” he wrote on Twitter. JD Vance (who went to Yale Law School) told the Washington Post that “Biden essentially wants blue-collar workers like truck drivers – who didn’t have the luxury of going to college to get drunk for four years – to bail out a bunch of upper-middle-class kids.”The reality is that the student loans of those in the highest income quartile – people making more than $97,000 – do make up a third of all outstanding student debt. But many low-income Americans also have student debt, though the amount of debt they have is smaller. Those making below $27,000 a year make up 17% of all borrowers, but their loans comprise 12% of all the outstanding debt.An income threshold could be a way for the government to target forgiveness to those who need it most. But some have pointed out that an income ceiling does not take into consideration a person’s wealth.“You’re looking at a snapshot of what your income was this year or last year, that tells you very little,” Jimenez said. “If your family has no wealth, you’re very differently situated from someone who has family wealth or personal wealth from previous careers.”Those who have been advocating for student debt cancellation say that $10,000 in forgiveness will not be enough to address the breadth of the crisis. Democratic lawmakers, including Senate majority leader Chuck Schumer, Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez, have called on Biden to cancel up to $50,000.“I don’t believe in a cutoff, especially for so many of the frontline workers who are drowning in debt and would likely be excluded from relief,” Ocasio-Cortez told the Washington Post. “Canceling $50,000 in debt is where you really make a dent in inequality and the racial gap. $10,000 isn’t.”Ending the student debt crisis for goodEven if Biden forgives some student debt, future college students will continue to take out loans – and at higher interest rates. Tackling the price tag of college will come with its own complications, but advocates say it will be necessary to ensure student debt does not get worse.While Biden’s plan for free community college was killed along with the rest of the social and climate spending bill that was making its way through Congress, some efforts for better college funding are happening at the local level.In March, the governor of New Mexico signed a bill that would use $75m in state funds to cover tuition and fees for undergraduate students at two- and four-year colleges. Drives for similar government support have been seen in Pennsylvania, California and Maine.“The cost of college is too high for a lot of students to manage without debt. Making it so that students can go without debt or take less debt in the first place is the thing that we really need to be focusing on,” Miller said. “What about the next generation or the one after that?”
      This article was amended on 26 May 2022. An earlier version stated that student debt had doubled over 16 years. In fact, it has more than tripled.
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      Biden isn’t serious about forgiving student debt. ‘Means-testing’ is a con | David Sirota

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      Biden isn’t serious about forgiving student debt. ‘Means-testing’ is a conDavid Sirota and Andrew PerezThe Biden administration’s proposal is cynicism masquerading as populism – and it will enrage everyone and hurt the Democrats’ electoral chances During the 2020 Democratic primary, Pete Buttigieg’s personal ambition led him to poison the conversation about education in America. Desperate for a contrast point with his rivals, the son of a private university professor aired ads blasting the idea of tuition-free college because he said it would make higher education “free even for the kids of millionaires.”The attack line, borrowed from former secretary of state Hillary Clinton, was cynicism masquerading as populism. It was an attempt to limit the financial and political benefits of a proposal to make college free. Worse, it was disguised as a brave stand against the oligarchs bankrolling Buttigieg’s campaign, even though it actually wasn’t – almost no rich scions would benefit from free college.Buttigieg and copycats like Amy Klobuchar were pushing a larger lie. Call it the means-testing con – the idea that social programs should not be universal, and should instead only be available to those who fall below a certain income level. It is a concept eroding national unity and being carried forward by wealthy pundits and a Democratic party that has discarded the lessons of its own universalist triumphs like social security, Medicare and the GI Bill.This week the Biden administration tore a page from Buttigieg’s book. The White House leaked that it is considering finally following through on Joe Biden’s promise to cancel some student debt – but not the $50,000 pushed by congressional Democrats, and only for those below an income threshold.In trial-ballooning the college debt relief proposal, the president is boosting the media-manufactured fiction that real, universal college debt relief would mostly help rich Ivy League kids – even though data from the Roosevelt Institute conclusively proves that canceling student debt “would provide more benefits to those with fewer economic resources and could play a critical role in addressing the racial wealth gap and building the Black middle class”.As the report points out: “People from wealthy backgrounds (and their parents) rarely use student loans to pay for college.”But setting aside how the media-driven discourse omits those inconvenient facts, what’s noteworthy here is the underlying principle.This latest discussion of means-testing follows Biden and congressional Democrats pushing to substantially limit eligibility for Covid-19 survival checks and the expanded child tax credit. Taken together, it suggests that Democrats’ zeal for means-testing is no anomaly – it is a deeply held ideology that is both dangerous for the party’s electoral prospects and for the country’s fraying social contract.The superficial appeal of means-testing is obvious: it promises to prevent giving even more public money to rich people who don’t need it.But in practice, means-testing is a way to take simple universal programs and make them complicated and inaccessible. Calculating exact income levels and then proving them for eligibility means reams of red tape for both the potential beneficiary and a government bureaucracy that must be created to process that paperwork.Data from the food stamp and Medicaid programs illustrate how means-testing creates brutal time and administrative barriers to benefits, which reduce payouts to eligible populations. In the case of means-testing student debt relief, those barriers may end up wholly excluding large swaths of working-class debtors.This is a feature, not a bug – it is means-testers’ unstated objective. They want to limit benefits for the working class, but not admit that’s their goal.Universal programs like social security and Medicare were what we once defined as “society” or “civilization”. They may be derided as “entitlements”, but the reason they have (so far) survived for so long is because their universality makes them wildly successful in their missions and more difficult to demonize. Their universality also precludes austerians from otherizing and disparaging the programs’ recipients.Means-testing destroys that potential unity. It may initially poll well, but it turns “entitlements” into complicated “welfare” programs only for certain groups, which then makes those programs less popular and makes the beneficiaries easy scapegoats for political opportunists. Think of Ronald Reagan’s “welfare queen” trope vilifying recipients of means-tested food stamps.Now sure, billionaires are eligible for social security and Medicare, and their kids are eligible for free K-12 education – and that aristocracy doesn’t need that help. But when those programs were created, we accepted that rich people being granted access to those programs along with everyone else was the relatively small price to pay for simplicity, universalism and the attendant national unity that comes with it.Not surprisingly, Democrats’ creation of popular universalist programs coincided with the most electorally successful era in the party’s history.Equally unsurprising: the shift to fake means-test populism has coincided with rising popular hatred of liberal technocrats and the Democratic party they control.What is surprising is that Republicans may be starting to understand all this better than Democrats.For instance, Donald Trump’s signature spending legislation offered direct, non-means-tested aid to small businesses during the pandemic. The former president touted a plan to just pay hospital bills for Covid patients who didn’t have coverage. The programs were hardly perfect, but they were straightforward, universal, relatively successful and extremely popular because they embodied a powerful principle: keep it simple, stupid.When it comes to student debt relief, there’s a rare chance for Democrats to also embrace simplicity – and prevent Republicans from outflanking them.More specifically, they can use the student debt crisis to finally return to their universalist roots – and they don’t have to skimp and provide merely $10,000 worth of relief.Biden could simply send out a one-page letter to every student borrower telling them that their federal student debt is now $0.Yes, Republican lawmakers would try to block it and affluent pundits would tweet-cry about it to each other.But amid all that elite whining and couch-fainting, Democrats would be launching a battle against an immoral system of education debt – and directly helping 40 million voters ahead of a midterm election.It’s so easy and simple – which is probably why they won’t do it.
      David Sirota is a Guardian US columnist and an award-winning investigative journalist. He is an editor-at-large at Jacobin, and the founder of the Lever. He served as Bernie Sanders’ presidential campaign speechwriter
      Andrew Perez is a senior editor at The Lever and a co-founder of the Democratic Policy Center
      A version of this piece was first published in the Lever, a reader-supported investigative news outlet
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