A college education is supposed to accelerate economic mobility, not stifle it. The cost of admission to university forces many students to take out heavy loans which hamper their entry into the middle class. Of course, a college degree usually pays off in the long run, but the financial situation of low-income students shouldn’t leave them wondering if getting a degree will meet their immediate needs.
A college degree gives most young people their best shot at achieving the American dream; it should be as easy to access as primary or secondary school. Senator Bernie Sanders, an independent from Vermont, is targeting the student debt problem with a proposal to cancel $ 1.6 trillion in student loans pending as he runs for the Democratic presidential candidate. He is also proposing a plan for a tuition-free college, which would provide relief to those who desperately need it, as well as those who don’t.
Sanders College for All Act make public two- and four-year colleges, trade schools and apprenticeship programs free. The program would be expensive. The Sanders campaign estimates that the plan would cost $ 2.2 trillion, to pay with a 0.5% tax on stock transactions and a 0.1% tax on bonds. Representative Ilhan Omar (D-Minn.), Who announced the bill alongside Sanders at a press conference on Capitol Hill, declared in a tweet: “The American people bailed out Wall Street. It’s time for Wall Street to bail out the American people. The Sanders plan calls it a “Robin Hood tax”.
An eye-for-eye fundraising strategy might not be the most precise approach, but there are only a limited number of places to find trillions of dollars. A fellow Democratic nomination contestant, Senator Elizabeth Warren (D-Mass.), Proposed a debt relief plan this would eliminate up to $ 50,000 in loan debt for borrowers with household income of less than $ 100,000. Borrowers in households with incomes between $ 100,000 and $ 250,000 would receive fewer discounts. Warren would pay for the plan with a 2% wealth tax on those whose total income exceeds $ 50 million.
Some see Sanders’ plan as unnecessarily expensive. “Most borrowers are able to repay their student loans,” Mark Kantrowitz, editor of Savingforcollege.com told CNBC.com. The richest 25% of earners have about a third of all credit debt. This means that the proposal would subsidize people who do not need it.
Sanders’ proposal certainly appeals to the progressive wing of the Democratic Party, but it could also attract others that Democrats will need at the polls.
If the plan has any chance of success, it must include students who do not necessarily need the grant. At the state level, middle-class parents routinely push back efforts to restrict merit-based scholarships to low-income residents – including middle-class children as scholarship recipients, and their parents’ resistance may subside. This political logic allowed leaders of the city of San Antonio in New York to successfully launch public preschool programs that are costly, but that voters are willing to pay because almost everyone has access.
I will accept an inclusive proposal if it means passing a law so that it can help those who need debt relief and make college affordable for everyone, including black people who are struggling with it. a loan debt.
Disparities in the accumulation of student debt are increasingly racialized. Black students struggle with 85.8% more debt than their white peers, according to a 2018 article in the Journal of Sociology of Race and Ethnicity. This gap increases over time, increasing by 6.7% each year after graduation. In addition to taking out higher loans initially, black borrowers repay their loans at a rate of 3.9% per annum, compared to 10.8% per annum for white Americans. In historically black private colleges and universities (HBCUs), 75% of students have taken out federal loans, while only 51% of those in private non-HBCU institutions can say the same.
African American college graduates are often more ambitious than whites to further their education, but their efforts to move forward may leave them even further behind. Black graduates not only enroll in higher education at a higher rate than white, Hispanic, or Asian graduates, but are also twice as likely to incur student debt when they do. Forty-five percent of the debt gap can be attributed to graduate school enrollment.
The long-term consequences of not loan debt cancellation is mind boggling. If payment disparities persist, black adults will have 185.8% more student debt 15 years after graduation. And the debt gap continues to grow in magnitude. Four years after graduation, black students in 2008 cohort faced $ 24,720 more in student loans than their white counterparts, compared to the difference of $ 2,000 for the 1993 cohort.
Racial disparity in education debt is a major piece of the puzzle in the historic wealth gap between black and white Americans. Without substantial family wealth at their disposal, black students are more likely to finance their education through private loans rather than federal loans, exposing them to higher interest rates and minimal consumer protections. For-profit institutions also play a role—more black Americans enroll in these institutions, which have been criticized for their high tuition fees and nominal return on investment.
Our efforts to go to college and move up the social ladder in many cases worsen our financial situation. Student loans prevent many black borrowers from buying homes or starting a business. Education should increase opportunities for wealth creation rather than increase debt.
Many will cringe at the thought of forgiving loans to people who can pay it off, but should anyone have to take out loans to do what society needs and expects of us? Wall Street will certainly oppose the plan, but tapping into the right of the middle class can provide the support needed to pass the measure.
Marissa Marshall provided invaluable search assistance for this position.