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Debt Forgiveness Is a Political Minefield

Debt Forgiveness Is a Political Minefield

The Chronicle of Higher Education

Kevin Carey
September 15, 2022
Last month the Biden administration announced plans to forgive the first $10,000 of most outstanding federal student loans, and up to $20,000 for students who received Pell Grants.
As a means of providing immediate relief to people caught in the pincers of credentialism, structural racism, and the Great Recession-era jobs crisis, it was brilliant. But it did nothing to stop more debt from accumulating in the long term. The postsecondary cost crisis cannot be solved by letting colleges charge whatever they like, lending students large sums of money to pay those bills, and then immediately (or eventually) forgiving the loans.
The debt-relief movement grew out of the pure, uncut class consciousness of the Occupy protests and the larger generational grievance of millennials who left college with unprecedented loan burdens during the worst unemployment crisis in decades. Civil-rights advocates organized around new evidence of an acute student-borrowing crisis in the Black community. Progressive champions like Bernie Sanders and Elizabeth Warren took up the cause, and total loan forgiveness became a standard plank in the left agenda. Biden’s decision was an enormous victory for advocates and a case study in how seemingly radical policy ideas can become mainstream.
During months of intense lobbying earlier in 2022, advocates critiqued partial loan forgiveness as a weak half-measure — U.S. Rep. Alexandria Ocasio-Cortez called it “just enough to anger the people against it *and* the people who need forgiveness the most.” The Biden plan to make loan forgiveness contingent on income will require many people to apply for the benefit, and therefore exclude eligible borrowers whose difficulty in navigating the often-labyrinthine loan system is the reason they need help in the first place.
Biden’s decision to cap and means-test loan forgiveness reflects the ideological complexities of debt relief and the political challenges that result. Many people with student-loan debt are in a precarious financial position, particularly those who did not complete a degree and disproportionately people of color. At the same time, people who go to college are, on average, much wealthier and healthier than those who do not. Forgiveness helps many people in need, but it doesn’t benefit many of the people who need the most help.
Still, the announcement itself was greeted with close to universal praise among advocates for students. Even compared to the expansive ambitions of the invigorated left, $500 billion in debt relief is no small thing.

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