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EDITORIAL: Biden needs to cancel student debt

President-elect Joe Biden and Vice President-elect Kamala Harris have an opportunity to confront a growing student debt crisis. By doing so, they will boost the economy in the midst of a deep, painful recession. – Photo by Joe Biden / Twitter

Higher education used to be unnecessary for employment. Look no further than the data — in 1940, 5.5 percent of men and 3.8 percent of women had college degrees. By 2019, those numbers swelled up to 35.4 percent and 36.6 percent, respectively. 

On the surface, that looks great. More and more people are acquiring post-secondary degrees, meaning that Americans as a whole are getting more educated. 

But in reality, most university enrollees are not after, primarily speaking, heightened knowledge. They seek the credential — a degree — that allows them to earn a decent, stable income as they enter adulthood (and sometimes a bachelor's degree is not even enough).

The makeup of our workforce shows exactly why this change has taken place. Manufacturing used to be a gigantic portion of the U.S. economy but has dwindled in recent decades. In 1953, 28.1 percent of our gross domestic product came from the manufacturing industry. Today? In the first quarter of 2019, only 11.3 percent did.

Such jobs paid stable wages back then, often supported by union organizations (unions are also dwindling). On top of that, manufacturing and similarly “low-skilled” jobs did not require a college degree.

But due to government incompetence and shortsightedness, those quality jobs have been lost. Wages have stagnated, the rich have gotten richer and a college degree is now essentially a requirement to survive in America’s newfound, service-based economy. Our leaders have clearly failed us, and rising up financially in America is costlier than ever.

This new age — an age that forces you to get a degree to make a living — has been fueled by frightening amounts of student loan debt.

“The latest student loan debt statistics for 2020 show how serious the student loan debt crisis has become for borrowers across all demographics and age groups. There are 45 million borrowers who collectively owe nearly $1.6 trillion in student loan debt in the U.S.,” according to Forbes.

Such widespread, imposing debt harms disadvantaged communities — the poor, and the ethnic minorities more likely to be in the lower tier of the socioeconomic spectrum — unfairly.

This debt, though, harms the economy as a whole and impedes the lives of those who owe it. In a sense, student debt is an issue that hurts everyone, even the wealthy.

“It’s well known that many borrowers struggle to repay their students loans, with many saying the debt has contributed to decisions to delay homeownership, marriage, starting a family or saving for retirement,” according to the National Association of Student Financial Aid Administrators. 

With recent graduates funneling their income into paying of piles of debt, less of their money goes into other sections of the economy, meaning that business owners are missing out on consumers from a key demographic — young adults.

The federal government has played a generational role in getting us into this mess. Its policies essentially forced us to attend college or risk poverty. On top of that, it also provides a huge portion of these loans.

As a result, it is also their responsibility to get us out of this pinch. Luckily, there have been rumblings in recent days about President-elect Joe Biden doing just that.

Senate Minority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.) have called on Biden to eliminate a huge portion of student loan debt with an executive order, and have written a proposal that would enable Biden to do so.

“Schumer … said Biden should enact a plan that he laid out earlier this year alongside Warren … under which the president could use executive authority to immediately cancel up to $50,000 of student debt per borrower,” according to Fox Business.

The total debt amount reaches $1.6 trillion, meaning that the complete and total absolution of it would cost, well, $1.6 trillion. That is a big number, for sure, but our recent stimulus bill cost $2.2 trillion, meaning that it would not be an unprecedented amount of money to spend.

For the sake of bridging income inequality, racial inequality, mitigating past mistakes and promoting broader economic health in the face of the coronavirus disease (COVID-19) pandemic, Biden needs to prove that he was elected for a reason and eliminate a large portion of America’s student debt.

The Daily Targum's editorials represent the views of the majority of the 152nd editorial board. Columns, cartoons and letters do not necessarily reflect the views of the Targum Publishing Company or its staff.


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