If Biden represents the working class, he should cancel all student debt

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https://thehill.com/opinion/education/532984-if-biden-represents-the-working-class-he-should-cancel-all-student-debt

 

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On the campaign trail, former Vice President Joe Biden leaned heavily on his working-class roots. 

Hailing from Scranton, Penn., he asserted that his blue collar upbringing stayed with him long after he left his hometown at the age of 10, despite being a Washington insider for 40 years. 

He evoked these roots by characterizing the election as a choice between the interests of “Scranton vs. Park Avenue.” If Biden represents the working class in Pennsylvania and throughout the country — as he claims — he should cancel all outstanding student debt.

Student debt is a ballooning crisis, leaving former students with overwhelming bills that they cannot afford to pay. Nationwide, approximately 43 million borrowers owe about $1.7 trillion in student loans. For the graduation year 2019, 62 percent of graduates across the country left college with an average of $29,076 in student debt. This means that these recent graduates, most of whom are working class by anyone’s definition, make average monthly payments of $300 on their student loans while struggling, in a down labor market, to make rent, pay for food, medical care and transportation. This has only been exacerbated in the COVID-19 era, during which one in three households are struggling to pay their monthly bills.

Under the Higher Education Act, President-elect Biden will have the executive authority to cancel the entirety of student debt for all 43 million borrowers nationwide with the stroke of a pen. In the current political moment, Biden has expressed an interest in canceling $10,000 per borrower, while other leaders in the Democratic party have advocated for$50,000 per borrower. A $10,000 cancelation might stave off an impending economic crisis in the short term. But given that four out of 10 borrowers are at risk of default by 2023 and will likely be in the same situation in a few years. Ten thousand dollars is not enough. 

Canceling student debt would provide an enormous stimulus to the economy, which is currently facing the worst conditions since the Great Depression. It has been widely reported that millions of student loan borrowers have delayed buying houses, getting married and having children due to their debt. It is projected that canceling student debt would provide an annual GDP increase of $86 billion to $108 billion, and help to close the racial wealth gap since student debt disproportionately affects students and alumni of color. Since there are no bankruptcy protections for student debt and black graduates default at five times the rate of their white peers, canceling student debt would also help to protect black graduates from defaulting on their loans. Student debt cancelation on a broad scale would create a pathway for former student debtors to enter the economy more fully by achieving the life events they have previously shelved. 

In addition to its economic advantages, broad student debt relief is politically astute. Forty three million voters nationwide would directly benefit from the cancelation and be more inclined to vote Democrat in the next election. It would be an especially powerful inducement for younger voters, most of whom begrudgingly held their noses and voted for Biden not because his policies were popular, but because the alternative would have been four more years of President Trump. According to a recent survey from Vox and Data for Progress , a majority of Democrats, Black voters and young voters support Biden canceling $50,000 in student debt for households that make under $125,000 annually. 

Critics of student debt cancelation argue that doing so rewards the lazy and financially irresponsible. Yet, most borrowers are barely able to touch the principal of their loans through their monthly payments. Wages have stagnated over the past 40 years and haven’t risen to meet inflation, let alone the ever-rising cost of higher education, which has nearly doubled since the 1980s. To compare the price of education to wages over time, the cost of education has risen eight times faster than wages. According todata from the Economic Policy Institute (EPI), since 1979 wages for the so-called middle class have only increased 6 percent — less than 0.2 percent each year — while low-wage workers’ wages have decreased 5 percent. Student debtors simply haven’t been paid wages sufficient to meet their basic needs. 

Some critics argue that student debt cancelation is a regressive policy because it would primarily serve the highest earners among us, and others claim that canceling debt now would not be fair to all the people who paid back their student debt. While broad student debt relief would cancel debt for high earners as well, the policy would be most effective in wiping out debt for those with the highest debt-to-income ratios, as it would slash their total debt from above their annual income to one-fifth of their income. Finally, for all who claim it wouldn’t be fair to those who have already paid back their loans, by that logic, we shouldn’t enact any policy that would ever better lives because it wouldn’t be fair to the people who came before. 

Canceling student debt would be a lifeline to working people across the United States, enabling millions of people to participate in the economy fully and no longer be saddled with the debt that holds them back. After all, the working class comes in many different shapes and sizes these days; it’s not just a group of men mining coal or forging steel or assembling automobiles. Some have college degrees and work in offices, restaurants, hospitals, supermarkets and schools.

If Biden wants to win the support of the entire working class he should relieve us of the burden of student debt so that we can do more than just survive — we can live.

Amy Czulada is a research analyst for an east coast labor union, the SEIU 32BJ. She is an active member of the immigrant rights' and labor movements.