President Joe Biden will not consider a plan that promotes loan forgiveness for students attending elite institutions like Penn.

Credit: Ananya Chandra

Despite the widespread reaction from students and progressivePresident Joe Biden’s statement that he will not consider a plan that promotes loan cancellation for students attending elite institutions like Penn, Harvard University and Yale University has been greeted with l agreement and understanding from some of Penn’s professors.

In response to a question from February 16 town hall if he considered a broader plan to write off at least $ 50,000 in student debt, Biden replied that he “won’t make that happen” – drawing confusion and anger of those who had hoped that the president would play a more active role in the cancellation of the debt. Still, experts argue that those who graduate with the highest amount of student debt often end up with higher incomes after graduating from four-year college programs, and they believe Biden should prioritize other policies that target wealth inequalities more directly.

Assistant professor of business economics and public policy Ben Lockwood said there may be a more productive way to spend the $ 50,000 allocated in the Democrats’ proposed debt relief plan. Children’s allowances, direct income support or early-stage college grants are all interventions that he says could help people more gradually.

Former Director of the Higher Education Research Institute and Penn’s adjunct professor Joni Finney agreed, as she believes Biden has other priorities such as instituting increased funding for the early childhood education.

By Biden higher education plans During his presidential campaign, he included policies to increase accessibility to two- or four-year institutions by making public colleges and universities free for all families with incomes below $ 125,000.

Finney said she sees credit for Biden’s reluctance to support a plan to write off up to $ 50,000 in student debt, but stressed that it’s important to recognize which subset of students have the more student debt and which subset feels the burden of that debt the most.

Often, she says, it’s not those who frequent Ivy League institutions.

Nationwide, about $ 1.6 trillion in federal student loans of by around 43 million borrowers, but that’s valued that no more than 0.3% of federal student loan borrowers attended Ivy League schools. The same estimate shows that 49% of borrowers – the largest share – were from public colleges.

Sandy Baum, senior fellow at the Center for Education Data and Policy at the Urban Institute, said people need to see the issue of student debt in a more realistic and holistic way. She added that it is critical that Biden does not implement regressive policies that primarily serve privileged members of society who have graduated from prestigious colleges.

“What matters is how much [students] borrowed, how much income they have now and how well equipped they are to repay it, ”Baum said. “The truth is, most of the people who went to Harvard, Yale, and Penn are doing very well and we shouldn’t write off their debt. It’s not because of where they went to college; it’s because they’re okay now.

Lockwood explained that the people who struggle the most are usually not the ones who have the most student loan debt by attending expensive schools, as they often end up with higher incomes because they graduated from programs. four-year academics.

People with “smaller loan balances” who were unable to graduate or get prestigious degrees are more likely to be overwhelmed by paying off student loans, Lockwood said.

Baum said she understood Biden’s point of view and called a plan that would write off $ 50,000 for anyone with student loan debt “a pretty unfair and irresponsible idea.”

Student loan debt is disproportionately detained by households in the upper half of the country income distribution, according to Baum, and a third of borrowers owes no more than $ 10,000. These borrowers are the ones who are probably default on their loans and have trouble making payments.

Baum added that people need to take a step back when addressing these issues, and also advocate for medical and utility debt relief that is increasingly needed amid the pandemic.

Although Ms Finney thinks student loan debt is a serious problem, she said the government needs to focus on addressing the systemic issues that caused this debt in the first place, in addition to helping sub-groups. of students by canceling certain student loan debts.

“I’m worried about this whole debt conversation, to begin with, because it doesn’t get to the core issue,” Finney said. “We have this whole conversation about debt without saying why it is necessary for all these young people to borrow so much money.”

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