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When Discussing Student Loan Forgiveness, Start with Racial Justice

Benjamin Franklin on the hundred dollar bill wearing a mortarboard.

Pay attention to electoral politics long enough and you’re sure to hear the pundit’s admonition that a successful candidate campaigns in poetry and governs in prose. Though not exactly an actionable piece of advice (so, my policies should… rhyme?) what’s captured here is the intuitive sense that successful campaigns are about movement building, about inspiring people with a vision of better lives. And it’s hard to build a movement’s worth of inspiration when you’re bogged down in discussions of how to pay for things or avoid unintended consequences. Poetry, in other words, is the big idea — the rallying cry. Prose, the details of governing, is what happens after the election night confetti has been swept up.

Look no further for an example of campaign poetry than the multiple instances of 2020 presidential candidates proposing to forgive student loan debt. This idea has been voiced by candidates near the top of the polls like Sen. Elizabeth Warren and Sen. Bernie Sanders, as well as candidates still looking to catch on with voters, like former Cabinet official Julian Castro. The idea of loan forgiveness is a simple pitch, one that connects immediately with tens of millions of Americans who struggle to afford education beyond high school.

Set aside the merits of various debt-forgiveness proposals — an exercise already undertaken by some very smart people — and simply acknowledge that this is indeed a big idea, and a timely one. Tuition has increased at five times the rate of inflation over the last 35 years. Nearly a third of college students come from families at or below the federal poverty guideline. Almost two-thirds of college students work. And 36 percent of college students reported not knowing where their next meal was coming from. Even as education after high school becomes more critical than ever it remains out of reach for too many.

Said plainly: College is too expensive, and millions of students need more financial support to pursue the credential they need.

With that established, we at Lumina agree that federal policy must play a role in easing financial stress on students and their families. And that starts with ensuring that colleges and universities accurately estimate costs. Federal subsidies for students from low-income households should be prioritized, and these subsidies must be structured to reduce the risk of students stopping or dropping out. We need to offer federal student aid programs that are flexible enough to meet the full range of students’ needs and costs. We need a new take on the state-federal partnership to address affordability issues. And we must frame affordability in a way that is clear and predictable, built around a defined financial benefit, and based on what students and families can reasonably contribute (and for many families that contribution is zero).

And yet despite the seriousness of this affordability problem, debt forgiveness isn’t solely or fundamentally a response to affordability. If debt forgiveness is the poetry, the prose that must ultimately follow behind it is a story about equity.

Data show significant race-based differences in the amount of debt that students of color assume and can readily pay. We have a particular concern about black students and families. African-American families are more likely to borrow than white, Latino, or Asian families. Consider also that 86 percent of black bachelor’s degree recipients received student loans, and a staggering 49 percent of them went on to face default within 12 years; a rate more than double that of their white peers.

Debt forgiveness should really be about the profound injustice faced by too many students in a system still clawing its way out of more than two centuries of inequity. Black, Hispanic, and Native American students disproportionately start with less familial wealth, face barriers at institutions shaped by a legacy of systemic racism, and then take their completed credentials into a job market in which their median earnings remain a fraction of their white counterparts. Student debt being part of that impossible equation is something that we must all confront.

This then implies a process that goes beyond forgiveness, one that must start with the recognition and analysis of historic, persistent factors that have created an unequal postsecondary education system. One that bluntly acknowledges that race matters in this context and ignoring race will not reduce default rates or increase completion.

If we agree that attainment of education after high school lies at the root of economic, civic, and social success then we must also agree that our system is in need of a fundamental redesign. We can no longer abide a postsecondary system that has historically excluded and least served those that needed it most. And while the poetry will move us — it must move us — it is ultimately the hard and satisfying prose that will create the equitable education system we have so long been due.

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Tracy Chen
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FEATURED VIDEO
Lumina Foundation: Working to ensure a quality education for all Americans
Lumina Foundation: Working to ensure a quality education for all Americans
August 8, 2019

Lumina Foundation is an independent, private foundation in the United States that is committed to making opportunities for learning beyond high school available to all. We envision a system that is easy to navigate, delivers fair results, and meets the nation’s need for talent through a broad range of credentials. Our goal is to prepare people for informed citizenship and for success in a global economy. Through our work and our partners’ efforts, we lift people out of poverty, reduce racial inequality, improve health and well-being, promote the availability of good jobs and economic growth, and build sustainable communities.