The Future of the Middle Class Depends on Student Loan Forgiveness
When the problem remains individual, so too do the solutions. Examine someone’s student loan journey from the outside, and you can find numerous places where you’d have advised them to take a different turn. To anyone with student debt, all of these arguments will be familiar: You should’ve read the fine print. You should’ve picked a different major. You should’ve looked up the graduation rates of that college. You should have consolidated. You shouldn’t have consolidated. You should’ve understood compounding interest. You shouldn’t have gone to grad school. You should’ve called your loan servicer and sat on hold for an hour every day until you got this sorted out. You should have survived on rice and beans. You should’ve taken a second, or third, or fourth job. You should’ve lived a completely different life, and made completely different decisions. Maybe then you wouldn’t have this debt.
You might hear these arguments on Twitter, from your friend’s dad who has thought about the issue for 10 minutes before arriving at an immovable position, and from politicians who use them as the explicit and implicit rationale for not granting loan forgiveness. Sometimes they’re cloaked in policy language of means testing and “fairness”; often they conjure an imaginary college graduate who would benefit from forgiveness but shouldn’t. Which is precisely what happened last week, when President Joe Biden rejected a town hall attendee’s call for $50,000 or more in debt forgiveness, stating that he was unwilling to grant relief “for people who have gone to Harvard and Yale and Penn.” (An estimated 0.3 percent of borrowers attended Ivy League colleges.)
Biden would like public colleges to be tuition-free for families making $125,000 or less, and community colleges to be free for all. Those are admirable beginnings of a holistic plan for affordable college moving forward, but his proposal to forgive just $10,000 in student debt — and try to repair income-driven repayment programs, particularly for those in public service — reproduces the same fundamental misunderstanding of the problem.
“We’re drowning in the technical details and neglecting the core moral argument,” Frederick Wherry, a professor of sociology at Princeton University and the director of the Dignity and Debt Network, told me. Student loans have failed to serve their original function, instead working to hollow out the middle class or prevent access to it altogether. Substantive — if not wholescale — student loan cancellation offers an opportunity to not only acknowledge how the program has misled millions of Americans but to begin the long process of restoring access, solidity, and racial equity to the middle class. None of that can happen if we keep focusing on individual scenarios.
“There are so many dead-end conversations that we can continue to have about student debt,” Louise Seamster, a sociologist at the University of Iowa who studies race and inequity, explains. “So we have to ask ourselves, how can we talk about this differently?”
The federal student loans program was conceptualized as an equalizer, a way to allow people without financial stability to take out small amounts with low-interest or even subsidized loans, to get their foot in the door of the American dream. For millions of Americans, it made college not just accessible but imaginable. The idea was simple, and not unlike an investment in, say, a home. Whatever money you took out to cover the cost of college, whatever interest you ended up paying on the loan as you paid it off, all of it would be eclipsed by a so-called diploma bump. Sure, you were paying off debt. But you were also making a lot more money than you would have without that degree.
For years, this has been the animating theory of American student loans. They’re not a shortcut to the middle class or a cheat code, but a high-stakes workaround, a back route, a way to give yourself the bootstraps so you can actually pull yourself up by them. A half-century into this student debt experiment, we need to face a new reality. For millions of Americans, the back route has led them far, far astray.
Part of the problem, according to Seamster, is that the student loan program was intended as a wealth-building program. Like previous wealth-building programs — the mortgage assistance programs in the 1930s and the GI Bill — its beneficiaries were primarily white. Over the course of the postwar period, the white middle class expanded and solidified in part through attendance at robustly funded public institutions, with federally backed loans helping to cover the still relatively low tuition.
This path to the middle class was in place just long enough for it to seem secure: get into college, get a job, buy a house, watch your wealth grow, and then pass it along to your kids. But this was only really a safe bet if you were a white man, and when women and people of color began down the path in greater numbers, the government and taxpayers essentially stopped paying for its maintenance.