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OPINION

The Biden administration must cancel student loan debt

It would increase opportunities for an entire generation to invest in entrepreneurship, retirement accounts, and generational wealth through homeownership.

Samantha Greaves, center, and her fellow graduates applaud as they are matriculated in rows allowing space for covid-safe physical distancing at Suffolk University commencement at Fenway Park in May.
Samantha Greaves, center, and her fellow graduates applaud as they are matriculated in rows allowing space for covid-safe physical distancing at Suffolk University commencement at Fenway Park in May.Josh Reynolds for The Boston Globe

Just a few classes shy of her bachelor’s degree, my mother made an impossible choice: to continue on or leave college. Facing medical issues, mental illness, and the stress of parenting seven children while homeless, she was struggling — her grades suffered, and she dropped out of the university. When students don’t complete their degree, their student loans cannot be forgiven or canceled, and within six months of leaving school, the first bill arrives. With thousands of dollars in student loan debt and accrued interest, my mother was unable to return to school. While a college degree could have lifted my family from poverty before our conditions spiraled out of control, the cost of her incomplete education compounded it.

I applied to college to reshape the trajectory of my life and graduated from the University of Massachusetts Amherst in 2020. Like my mother, I accrued nearly $40,000 in debt, evident in the student loan bill that hangs on my bedroom wall. A brighter future offered by higher education comes with an asterisk — a debt that hinders social mobility and prevents many college graduates from buying homes, getting married, and even having children.

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While an education has often been described as a great equalizer, the high cost of a college degree reflects a growing contradiction. The systematic defunding of public higher education at the state and federal levels fuels the exclusivity and unaffordability of the “public option.” The hyper-competitive nature and burdensome administrative tasks of applying to college turns away many students from low-income communities while the high sticker price of many public and private colleges restricts access at the door to these same populations. The price of college disincentivizes poor and working-class applicants while threatening those who do attend with mounting debt.

As of 2021, the student loan debt crisis has reached $1.7 trillion and affects about 42 million borrowers. Much of this debt is held by students from low-income families. According to a Demos study, 84 percent of Pell Grant recipients at public institutions graduate with student debt compared with 46 percent of those who are not Pell-eligible. Furthermore, Black student borrowers disproportionately incur more debt to attend college and, upon graduation, default at rates five times higher than white students. According to research conducted at Columbia University, the higher default rate can be partly attributed to attendance at for-profit colleges and the historic racial-wealth gap.

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Subsequently, the burden of student loan debt acts as a barrier to individual participation in the economy. Many borrowers are less able to purchase homes, start businesses, and save for their futures. Households without student debt “have retirement and liquid assets that are considerably larger than those households with student debt,” according to the Demos study. Some borrowers even default on their loans if they are unable to pay them, hindering their credit score and ability to rent an apartment or take out loans in other areas. Those who struggle to complete their college education face the burden of student debt without a degree. Like my mother, they are required to pay them back without the benefit of the higher salary that a bachelor’s degree usually confers — college graduates typically earn $1 million more over the span of their careers than those without a degree.

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These intersecting issues necessitate immediate intervention to reduce the economic burden of a higher education and promote generational equity: full student loan debt cancellation and college investment.

Some argue against full student loan debt cancellation, claiming that student loan debt forgiveness would be a “hand up to the better off.” While debt cancellation will inevitably benefit a small proportion of affluent households, it will predominantly uplift the poor, working-class, and Black communities most burdened by the crisis. Additionally, it would have broader societal benefits by increasing opportunities for an entire generation to invest in entrepreneurship, retirement accounts, and generational wealth through homeownership.

The Biden administration has the authority, right now, to cancel all federally held student debt through executive order. While 92 percent of the cumulative student debt is held by the federal government, Biden has suggested he would support only $10,000 in student debt forgiveness. Members of Congress have instead advocated for $50,000 in debt cancellation, which would erase the debt of 80 percent of all borrowers.

With student loan payments set to begin again in October following the Biden administration’s extension of the pandemic moratorium, the president has the unique opportunity to go beyond another extension. By canceling all federal student loan debt, he will lift borrowers from their debt-sentence — fulfilling the promise offered by education and creating pathways for social mobility for those most in need of a chance at the American dream.

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Timothy Scalona is a first year law student at Suffolk Law.