Meet the researcher trying to get Biden to forgive student debt

Meet the researcher attempting to get Biden to forgive student debt

Charlie Eaton

Courtesy: Charlie Eaton

The odds of student loan forgiveness occurring have by no means been larger, consultants say. Yet quite a few giant obstacles stand in the best way, some sensible and others ideological.

Does the president have the authority to cancel the debt? Officials on the U.S. Department of Education and the U.S. Department of Justice are at present looking for solutions to that query.

If they conclude President Joe Biden can accomplish that, will he? And in the event that they determine he would not, will Democrats, regardless of their razor-thin majority, handle to go laws forgiving student debt?

At the middle of the ideological debate, in the meantime, is the query over who would actually profit from a jubilee. A variety of critics of broad student loan forgiveness say the coverage would direct taxpayer {dollars} to people who find themselves already comparatively well-off, since faculty levels result in greater earnings.

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Biden has additionally questioned the equity of canceling student debt, framing debtors on a number of latest events as extra privileged than others. “The idea that you go to Penn and you’re paying a total of 70,000 bucks a year and the public should pay for that? Biden said in an interview with The New York Times in May. “I do not agree.”

And at a CNN town hall back in February, Biden said it didn’t make sense to cancel the loans “for individuals who have gone to Harvard and Yale and Penn.”

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Now a group of scholars at the Roosevelt Institute, a progressive think tank, have published research they hope will change the minds of Biden and other critics when it comes to student loan forgiveness.

Their biggest finding is that canceling $50,000 for all student loan borrowers would wipe out more than $17,000 per person among Black households in the bottom 10% of net worth, and over $11,000 among white and Latinx households in that lowest range.

Meanwhile, the average cancellation would be just $562 per person for those in the top 10% of net worth.

In other words: A jubilee would most benefit those who are least well-off.

CNBC spoke this week with Charlie Eaton, an economic sociologist and one of the report’s authors, about its findings and how he hopes they will impact the ongoing debate about student loan forgiveness. (The interview has been condensed and edited for clarity.)

Annie Nova: Where do you think the idea that student loan forgiveness would help those who are well-off comes from?

Charlie Eaton: Part of the myth that cancellation would help wealthy people comes from the original theory that was used to justify student loans: that individuals are better off borrowing to go to college than not going to college at all. Folks are committed to this model and justify it as something that promotes equity.

Student loan forgiveness would only be a small initial step toward redressing the economic legacy of slavery and Jim Crow. But it’s necessary.

AN: You write that race is “a obtrusive omission” in the arguments against student loan forgiveness. Why do you think race has been left out?

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CE: A lot of the most groundbreaking work on wealth inequality has happened in the last decade. I think the newness of this knowledge is part of it. But there’s also been a willful ignorance on racial inequality by those folks who wanted to see student loans as an easy way to pay for higher education in America in place of adequate taxes and spending.

AN: You talk about student loan forgiveness as a form of racial reparations. Why?

CE: Student loan forgiveness would only be a small initial step toward redressing the economic legacy of slavery and Jim Crow. But it’s necessary to enable Black borrowers to build wealth, because Black college-goers borrow at much higher rates than white borrowers. And, as a result, it’s much harder for them to get home loans and accumulate savings.

AN: Your report expresses doubts about the effectiveness of more narrow student loan forgiveness policies, such as one that would target low-income borrowers. Why do you think a broader cancellation is the way to go?

CE: If you try to layer on these exclusions, you have greater risk of failing to undo the inequities that have been created by our student loan system. For example, if you were going to go just by income, and you said we’re not going to cancel student loans for folks who make more than $75,000 a year, you’d be excluding the disproportionate number of Black professionals who may have incomes at that level but also have much more student debt than their white counterparts.

AN: What do you see as the largest problem to getting student loans cancelled?

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CE: Joe Biden. He appears to have accepted this fantasy that student debt cancellation disproportionally helps wealthier people when the alternative is true. He has mentioned it would not be honest to cancel debt for people who went to Harvard or Yale or Penn. The factor is Harvard has basically already cancelled debt for its students: Only 3% of undergraduates at Harvard have any student loan debt in any respect. I’m hoping our analysis will get via to Biden to assist him perceive student debt cancellation will movement to those that want it.

AN: Do you already know if anybody within the Biden administration has seen your analysis but?

CE: We’ve shared our work instantly with White House and Department of Education workers. And we’re optimistic that the Biden administration is wanting critically on the president’s means to cancel student debt.

The White House didn’t instantly reply to a request for remark.

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