WASHINGTON – Joycelyn Fish drove through several feet of snow that blanketed Wisconsin one February night so she could get to a nationally televised town hall and question President Joe Biden about the crush of student debt.
The blunt reply she got from Biden—that he wouldn’t take action to eliminate $50,000 in debt per student borrower—surprised Fish, made headlines and trained attention anew on people struggling under student loan burdens in the economic downturn.
Biden at the Milwaukee town hall did say he’d be comfortable with Congress approving $10,000 in forgiveness per borrower, and in executive action has continued a Trump administration pause on student loan payments. The Department of Education also has announced the full cancellation of debt for 72,000 students who attended institutions that engaged in misconduct, amounting to $1 billion.
The sweeping pandemic relief plan passed by Congress and signed into law by Biden makes any loan cancellation tax-free, too.
But the president so far has resisted calls from some other Democrats to go any further in executive action, including the Democratic leader of the U.S. Senate.
“It’s time to act. We will keep fighting,” Senate Majority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren said in a joint statement the day after the town hall, advocating for Biden to cancel up to $50,000 in student debt.
Warren made student loans a major issue in her unsuccessful campaign for the 2020 presidential nomination, and since then has joined with other Democrats like Schumer in pushing for wiping out debt.
Progressives in the House are pressing as well.
“The case against student loan forgiveness is looking shakier by the day,” Rep. Alexandria Ocasio-Cortez, D-N.Y., tweeted after Biden’s comments. “We’ve got the *Senate Majority Leader* on board to forgive $50k. Biden’s holding back, but many of the arguments against it just don’t hold water on close inspection. We can and should do it. Keep pushing!”
Student debt tops $1.7T
The Federal Reserve estimates that the total student loan debt in the country is more than $1.7 trillion, with an average of $32,731 of debt per borrower.
About 11 percent of Nevada college graduates have student loan debt, according to Education Data. The total student loan debt among people in Nevada is $11 billion, with an average debt load of $33,600.
“I don’t think I fully knew 100 percent what I was getting myself into,” said Stacey Shadoff, a Nevada resident who found herself in deep student loan debt. “I wasn’t prepared for everything later on. If I understood better I would have made different decisions.”
Some Democrats say loan cancellation is a matter of social justice, among other things. “An ocean of student loan debt is holding back 43 million borrowers and disproportionately weighing down Black and Brown Americans,” Schumer and Warren said in their statement following the town hall.
“Cancelling $50,000 in federal student loan debt will help close the racial wealth gap, benefit the 40% of borrowers who do not have a college degree, and help stimulate the economy,” they continued.
Schumer contends that the administration on its own can act to forgive debt, rather than waiting for congressional action—which is probably difficult, given the 50-50 split in the Senate.
“I believe the current administration has the legal authority to forgive up to $50,000 in federal student loan debt—a life-changing policy decision that would boost our economy and help close the racial wealth gap,” Schumer said on the Senate floor while discussing the tax provision in the relief bill.
‘I will not make that happen’
During the Feb. 16 town hall, Fish asked the president if he would support eliminating $50,000 in student debt.
“We need student loan forgiveness beyond the potential $10,000 your administration has proposed,” she told Biden. “We need at least a $50,000 minimum. What will you do to make that happen?”
“I will not make that happen,” Biden said.
He went on to explain his answer, arguing that he didn’t want to write off $50,000 for those who went to Ivy League schools. He said he’s proposed plans for free tuition for community colleges, and said that families with a household income of under $125,000 should be able to send their kids to public universities for free.
Biden also proposed government forgiveness programs, such as allowing a student borrower to write off some debt after volunteering for several years.
“I’m prepared to write off the $10,000 debt, but not 50,” he said.
For Shadoff the private and federal student loan debt she incurred has followed her for 20 years. What started off as a little over $100,000 in debt later ballooned to $220,000, padded by interest and debt collector’s costs. A $10,000 loan forgiveness would only be a dent in her total loans.
“You don’t make enough to pay back anything directly out of school and by the time you get a chance you have all these added penalties and interest you didn’t have. Nobody graduates college and immediately becomes a CEO,” Shadoff said in an interview with the Nevada Current in December.
Audrey Peek, the assistant director of the SSTAR Lab which studies student loan debt in Wisconsin, said that sometimes making broad policy decisions, such as wiping out student debt across the board, can’t be as effective because student debt can vary by race, ethnicity and degree completion.
“We’re seeing in the data that race-neutral policies are not going to fix the deeply unequal racial divide in student loan debt and in the racial wealth gap, which is one of the reasons that people are interested in student debt cancellation,” Peek said.
A 2016 report from the Brooking Institution found that, on average, Black students who graduated owed $7,400 more than White, Asian and Latino students who graduated at the same time.
Peek also added that it’s important to understand why students must take out loans.
“We have a trend in the United States, not only in rising tuition, which has been well covered in the media, but rising non-tuition expenses, things like housing, car payments, child care,” she said. “Those are all expenses that students need to manage while they’re in college.”
The cost of living is also higher, she added.
“At the same time, median family income has not been rising, there are constrained family budgets across the country that have also led to increasing reliance on student loans, and that’s especially true for families of color,” Peek said. “Another reason that students borrow is that grants, another source of financial aid that many students rely on, have lost their purchasing power over time.”
Over the years, funding for federal Pell Grants has decreased to a point where grants cover about 29% of the average costs of tuition and fees, room and board at public colleges, compared to covering 79% of costs in 1975. Pell Grants are awarded to students based on family income.
Peek added that there are very few borrowers who have more than $100,000 in student loans, about 5% of all borrowers.
“The people who tend to have the most difficulty with repaying the debt are people who experience labor market discrimination, so people of color and people who don’t get a degree,” she said.
“So you have this debt, and no degree to show for it and thus repaying the debt becomes really hard.”
Student Debt Crisis, the nation’s largest student debt advocacy organization, partnered with Savi, a social impact technology company in December to survey how the pandemic has affected student loan borrowers across the country. The survey found that 6 in 10 Nevadans with student loans couldn’t make payments.
Lindsay Clark, director of external affairs for Savi, a tech company that helps people manage their student loans, said that once the suspension on student loan payments ends, defaulted student loans will be eligible for wage garnishment, possibly exacerbating issues like food insecurity and mental health.
“Unless something is done we are going to see borrowers who are going to go into default because they can not pay student loans, and we’re going to see a downward spiral from there,” Clark said.
Nevada Current reporter Jeniffer Solis contributed to this story.