Despite Campaign Promises, the Student Debt Crisis Has No End in Sight
Dr. Jill Biden speaking at Northern Virginia Community College, where she teaches English and writing. Source: ABC7
As midterms loom closer, President Biden is facing considerable pressure to relieve student debt, so Democrats can gain more political favor at the polls. Though the White House remains elusive on what the President will do to follow up on his campaign rhetoric, it is clear that the Biden Administration is coming up short on their promise to alleviate the Student Debt Crisis.
Nearly a year ago, President Biden and his wife Dr. Jill Biden announced their plans to offer two years of free community college for those eligible. But three weeks ago, Dr. Biden — a lifelong educator — announced that free community college was no longer included in the Build Back Better package. By eliminating cost from community college, students who otherwise would not have enrolled would have been given the opportunity to not only obtain a degree, but also gain access to higher paying jobs after graduation. Taking free community college off the table is a devastating blow to advocates for student debt relief and indicates that borrowers will likely not see any advances in student debt reform in the near future. Over 90 percent of student loans are federal loans, and President Biden has the power to eliminate the insurmountable weight of debt with just his signature. Currently, Americans owe approximately 1.5 trillion dollars in student debt, and the number continues to climb.
The Student Debt Crisis dominated many conversations in the 2020 primaries, as progressive candidates promoted student debt cancellation as a leading cause within their campaigns. But despite the hype around student debt reform, it seems that concerns in DC regarding the mounting debt of young Americans has taken a backseat. Student debt was never mentioned in President Biden’s first State of the Union address on Tuesday, despite his campaign promise to cancel student debt once in office. Both the failure to include free community college in the Build Back Better program and now Biden’s avoidance of the topic altogether show student debt’s dwindling priority within the administration.
Borrowers were dealt a small relief during the height pandemic when President Biden put a temporary pause on student debt repayments. However, bills will resume starting May 1st, and 93 percent of borrowers say they are not ready to resume monthly payments. The temporary pause in payments has dealt a much needed relief to young American borrowers and provided positive stimulus to the economy rather than devastation. On average, student loan payments remove $393 from individuals' disposable income, preventing them from spending it back into the economy. According to the Roosevelt Institute, once collections resume, “approximately $7.12 billion a month and $85.48 billion annually will be stripped from 18,125,800 student loan borrowers’ budgets.” For what seems like a catastrophic problem with an easy solution, politicians across the aisle cannot capitalize on what would be an overwhelmingly popular win.
Taking free community college off the table delivers a strong blow to those fighting to reform the higher education system; especially those wanting to bridge the education inequality gap between white and BIPOC students. UNC Professor Dr. Fenaba Addo says, “Any decision that is not in the direction of removing loan-based financial barriers to higher education disproportionately will continue to decenter Black and Latinx aspiring students and their families from this conversation.”
Regardless of incomes post-graduation, Black borrowers still find themselves saddled with more debt than their white counterparts. Much of this can be attributed to white generational wealth that keeps white borrowers afloat while black borrowers are saddled with the full force of debt. Black graduates owe approximately $25,000 more than white borrowers, which puts them further behind in paying off their debt. A study conducted by the Roosevelt Institute found that canceling $50,000 of student debt would immediately increase the wealth of Black Americans by 40 percent. Thus, Black borrowers are more unlikely to be able to purchase property, cars, or other measures to accumulate their own wealth. Thus, an insidious cycle continues and racial disparities in higher education widen.
When politicians talk about the economy, they rarely mention the Student Debt Crisis. Instead, blame gets placed on young borrowers, and the issue is largely seen as non-consequential for those that do not take part in the loan system. But really, massive amounts of individual debt negatively impacts everyone. Not only are BIPOC students continually excluded from institutions of higher education, but millions of Americans are unable to invest back into our economy. In North Carolina alone, 12.5 percent of the population has student debt. That is 1.3 million North Carolinians saddled with debt that averages $36, 293, and only goes up with added interest payments. How can we expect borrowers to reap the benefits of higher education when they are automatically burdened with massive debts immediately upon receiving their degree?
Unlike many issues in politics, the Student Debt Crisis has easy solutions; and even smaller ones along the way to getting rid of the crisis once and for all. Free community college is a start. Perhaps representatives are too generationally out of touch with the financial obligation of higher education, or perhaps they are just too out of touch with young voters. Regardless, reforming the student loan process is imperative to increasing the wealth of younger generations, and allowing students to benefit from hard-earned degrees.