FACT CHECK: Biden’s Comments on Loan Forgiveness and Elite Colleges
At a CNN town hall on Tuesday night, President Biden was asked if he supports the idea of forgiving up to $ 50,000 in student loan debt for individuals.
His answer: no. He supports the cancellation of $ 10,000 in debt, he explained. But he said he was afraid to write off big chunks of loans for people who went to Ivy League schools: “The idea that … I’m going to write off the debt, the billions of dollars in debt, for the folks who went to Harvard and Yale and Penn … ”
Instead, he explained, he prefers to use that money for other priorities, like early childhood education or free community colleges.
But here’s the problem: Regardless of the larger question of whether loan forgiveness is a good idea, Biden’s comments do not reflect the true picture of the $ 1.6 trillion owed by federal student borrowers, or borrowers who would benefit the most from the discount.
Most student loan borrowers does not have go to very selective colleges, because most students do not go to these schools. People who attend Ivy League schools make up less than 0.5% of the nearly 15 million undergraduates in the United States, and many of them do not need to take out student loans. to do it.
“Misperceptions that higher education graduates all come from elite institutions are pervasive and do not help educate the public about the value of post-secondary education,” says Fenaba Addo, associate professor who studying student loan debt at the University of North Carolina, Chapel Hill.
Think about it: students who to do going to the most selective schools tend to come from wealthy families, and many pay full tuition. Last year, 54% of undergraduates at the University of Pennsylvania, for example, weren’t even eligible for financial aid, according to school data. At Harvard, the number was 45%.
These highly selective colleges have long struggled to enroll students who are not among the richest in this country. A new report shows that even today, low-income students eligible for federal Pell Grants make up less than 16% of enrollment at many of these schools.
And for the students of those institutions which to do need financial help? Many offer financial aid programs designed to keep students free from federal student loans. At Harvard, only 2% of the undergraduate population receives federal student loans, according to the College Scorecard.
Instead of focusing, like Biden did, on who should not get the benefit, we should focus on who would really benefit from the loan cancellation, argues University of Pennsylvania researcher Jalil Mustaffa Bishop.
He says using the Ivy Leagues to advocate for much less, if any, debt reduction is misleading: the benefit is a topic of discussion to distract, ”he says. Households with student debt tend to have the least wealth, according to federal data. People who have trouble repaying student loans tend to be those who have not graduated and who have small debts.
“Yes [Biden] worries that the rich or the elite will take advantage, “Bishop adds, so there are policy approaches to deal with it:” He can focus on raising taxes on households earning over $ 400,000, as he promised it during his campaign.
Bishop’s research focuses on the debt burden of black borrowers, who are often the hardest hit by student debt. They face discrimination in the labor market, higher unemployment rates, lower family wealth and other forms of systemic racism.
He argues that the $ 50,000 loan cancellation figure could go a long way in reducing inequalities in a system that is forcing black families both to take on more debt and to have more difficulty repaying those loans.
Addo at UNC-Chapel Hill agrees: “We know black borrowers struggle to repay regardless of their type of institution and whether or not they have graduated.”
And so his advice for Biden the next time he’s asked about this issue? If you only get three sentences to talk about debt forgiveness, she says, “why not recognize that a debt of $ 1.7 trillion is an indication of a serious problem.”
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