WASHINGTON, D.C. — A new brief released today from the Progressive Policy Institute (PPI) commends President Biden’s bold vision to ease student debt burdens. The brief calls on the Administration to help borrowers in more meaningful ways by fixing America’s broken financing model for higher education, and investing in non-college pathways to good jobs.
Key highlights from the brief:
- More than 1/5 households hold a student loan, up from 1/10 in 1989.
- Millennials, who are already saddled with lower wages and lingering economic pains from the Great Recession, hold $497.6 billion in outstanding loans.
- Education debt is a generational/equity crisis. Borrowers are more likely to be lower-income, Black, and less likely to have generational wealth, making them more likely to default, which can lead to further worsening of poverty and the racial wealth gap.
- Biden has faced calls to cancel $50,000 in education debt for borrowers but the evidence suggests that this could be regressive and benefit many high-income households who don’t need relief.
- Education debt relief should not be a one-time fix. President Biden and Congress need to meaningfully address America’s broken financing model for higher education and invest in non-college pathways to good jobs.
The policy brief calls for the Biden Administration to take important key steps, including:
- Auto-enrollment in income-based repayment as opt-out for new and existing loans.
- Modernize the Public Service Loan Forgiveness Program to reward national or community service for our public servants and create incentives for public service.
- Accelerate attainment of credentials by making the process for earning college credit through Advanced Placement (AP), International Baccalaureate (IB) programs, and college courses taken in high school at community colleges, more transparent and accessible.
Veronica Goodman, PPI’s Director of Social Policy and author of the brief, said this:
“President Biden and Congressional Democrats have a rare opportunity to move fixing America’s broken higher education financing model to the center of the nation’s agenda.
They should follow targeted education debt relief with bold progressive reforms aimed at two critical national goals: Lowering college costs and thereby reduce the need for borrowing, and boosting public investment in the skills and career prospects of the majority of young Americans who do not get college degrees.”
Read the full report here.
