In an effort to dismiss the idea of cancelling all student loans, folks will often say that it would be a "big giveaway" to the upper middle class, or in other words "regressive."
In reality, cancelling student debt would actually benefit low income borrowers the most.
Thread.
In reality, cancelling student debt would actually benefit low income borrowers the most.
Thread.
There's a deep class bias in how we finance higher education. Even though some middle class/wealthier people have student debt, lower-income borrowers, especially Black and brown people, have higher balances and are more likely to leave school because they can't afford to pay.
Cancelling student loans would restore our commitment to education as a right while disproportionately benefitting the people who need it most. Why are we having a hard time paying down our debt?
Because the cost of college has gone up but our pay hasn’t.
Because the cost of college has gone up but our pay hasn’t.
Instead, the labor market has "credentialized." This means that, over the last few decades, people needed to take on more debt to get more degrees just to get the same jobs earning the same wages as people in previous generations.
As one analysis shows, a result of this "credentializing" is that more and more people have defaulted on their loans and more defaulters are low-income people and racial minorities – the same people who sought college credentials to try to get a pay raise that never materialized.
If college led to a higher paying job, then cancelling the debts of college graduates might be regressive. BUT, since most people, especially working class people, take on debt for degrees that DON’T lead to better jobs, cancelling student debt is NOT regressive.
Black students borrow more, and more frequently, to receive a bachelor’s degree, even at public colleges.
84% of grads who received Pell Grants graduate w/ debt, compared to >46% of non-Pell recipients. >63% of white grads from public schools borrow but 81% of Black grads do.
84% of grads who received Pell Grants graduate w/ debt, compared to >46% of non-Pell recipients. >63% of white grads from public schools borrow but 81% of Black grads do.
While those w/ a college degree are more likely to save or buy a home, student debt acts as a barrier. Households w/out student debt are more likely to own homes, have lower interest rates on mortgages, and have retirement/liquid assets much larger than those households w/ debt.
Want to learn more? Check out this report called...
The Debt Divide: The Racial and Class Bias Behind the "New Normal" of Student Borrowing
demos.org/research/debt-…
The Debt Divide: The Racial and Class Bias Behind the "New Normal" of Student Borrowing
demos.org/research/debt-…
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