Student Debt War Room
Canceling Student Debt Will Help Working People
- As President Biden considers decisive action to help struggling student loan borrowers, Republicans are stepping up their attacks.
- They know that this popular policy is the single biggest thing the President could do immediately to help working families struggling with rising costs.
- The President would get credit from tens of millions of Americans for helping them pay their bills. So of course they don’t want him to do it.
- Poll after poll after poll shows that the American public supports canceling student loan debt
- The reason is because there is scarcely a working person in America who does not have a friend, family member, or coworker weighed down by this debt.
- Talking heads with fancy degrees who oppose this policy live in a bubble of privilege that is completely disconnected from the reality of who borrows money to get an education
- 99.7% of people with federal loans didn’t attend an Ivy League school.
- Nearly forty percent of people with loans never even got a degree.
- The majority of loans are held by those with no household wealth at all. That’s not surprising. It’s the reason why they had to borrow money to try and get an education.
- And this is an issue of racial justice: twelve years after starting college, most Black borrowers actually owe more than they initially borrowed.
- We are talking about tens of millions of hard working people from working class families who invested in getting an education and are now drowning in debt through no fault of their own.
- Cancellation would have almost no effect on inflation - but it would put hundreds of dollars a month directly into the pockets of tens of millions of families who are struggling to pay their bills right now.
Canceling student debt would help working-and-middle class Americans.
- Nearly 40% of people with student debt do not have a degree. That means they are paying huge bills with only the income of a high school grad.
- 20% of borrowers are in default. Of those in default, 30% have been in default for more than 5 years.
- Nearly 9 million, or 20%, of all federal loan borrowers, are 50 years of age and older. Loan balances are growing fastest among borrowers aged 60-69.
- 12% of borrowers attended very selective colleges, with just 0.3% of borrowers attending Ivy League colleges.
- By contrast, about half (49%) of borrowers attended public colleges.
- 20% went to for-profit colleges, and are nearly 2X more likely to default on their debt than other borrowers.
- 91% of undergraduates at Grambling State University and53% of undergrads at the University of Delaware take out federal loans – compared that to just 2% of Harvard undergraduates.
- 80% of students attending HBCUs take out federal student loans.
- Undergraduate degree recipients from families with incomes between $35K-$70K are 13 percentage points more likely to have debt than students from families with incomes over $120K.
Canceling student debt would help Americans dealing with higher costs.
- Before the payment pause, borrowers paid an average of $393 a month in student loan payments – money that can now go toward necessities as prices rise.
- More than nine out of ten borrowers say the current moratorium on student loan payments has been critical to their financial well-being.
- Experts agree that inflation is almost entirely driven by causes unrelated to student debt, including supply chain issues and the war in Ukraine.
- Canceling monthly student loan payments for all borrowers over the past two years has not meaningfully contributed to inflation.
- Conservative think tanks estimate that each full year moratorium on student debt repayment adds about “.2 percentage points to inflation.” In other words, less than 3% of total annualized inflation is likely attributable to the student loan payment pause.
- The annual amount of cancellation during the payment pause represents only half of one percent of overall yearly household spending.
- Research shows that cancellation would boost GDP by $174 billion in the first year alone, create up to 1.5 million jobs, jumpstart small business formation, and help borrowers become homeowners.
Canceling student debt would help close the racial wealth gap among borrowers.
- Overall, 86% of Black students take out federal student loans to attend college, compared to 68% of white students.
- Black women shoulder a disproportionate amount of the student debt burden, holding 47% more debt than white men and 27% more than white women.
- Among those who received bachelor’s degrees, Black borrowers have a default rate more than 5 times that of white borrowers – and one higher than white students that did not complete their degrees.
- Twelve years after starting college, 66% of Black borrowers owe more on their loans than originally borrowed, compared to only 30% of white borrowers.
- Twenty years after taking out their student loans, the typical white borrower owes about 6% of their original debt. The typical Black borrower owes 95% of their original debt.
- Black students’ struggle with debt is compounded by lower salaries and lower returns to education – which encourages borrowers to accumulate more debt to earn additional credentials to offset the labor market discrimination they face.
- Canceling $50,000 in student loan debt would immediately increase the wealth of Black American borrowers by 40% and close the Black-White wealth gap among borrowers by 25 percentage points.
Canceling student debt is broadly popular with American voters.
- 62% of all likely voters support cancellation.
- 84% of Black likely voters support cancellation.
- 72% of younger people support cancellation.
- 63% of likely voters who don’t have student loans support cancellation.
- A majority of young people in swing states are more likely to vote in 2022 if student debt is canceled.
Canceling student debt would benefit millions of Americans.
- Canceling $10,000 would wipe out debt for more than 15 million borrowers.
- Canceling $20,000 would wipe out debt for more than 24 million borrowers.
- Canceling $30,000 would wipe out debt for more than 30 million borrowers.
- Canceling $40,000 would wipe out debt for more than 33 million borrowers.
- Canceling $50,000 would wipe out debt for more than 36 million borrowers.