Reports that President Biden is seriously considering canceling some portion of the $1.7 trillion in outstanding student debt have been circulating for weeks with an official announcement to come as soon as this week. It's hard to overstate how significant and necessary this step is. As a Black woman, a mother, and someone with over $10,000 in outstanding student debt, my advice to the Biden administration is Go Big and Keep it Simple!!
Here's just a few reasons why taking executive action is both good politics and good policy:
It's wildly popular across party, demographics and regions. In fact, even, 6-in-10 people without a college degree support cancellation. By nearly all measures considered relevant in modern politics, this is a political win for Democrats and a president who are desperate for one.
Biden would actually be fulfilling a campaign promise, something that is far too rare in recent political memory, and a promise that would greatly benefit a portion of his base that is increasingly unimpressed.
Student debt has robbed millions of people – particularly Gen X and Millennials – from fully participating in the economy and reaching milestones of previous generations.
Reports about the specifics of cancellation range, and of course, the devil is in the details. The who, what and how of debt cancellation will determine how much of the economic and political bounce it brings in these crucial months leading up to the midterms. Let’s be honest, Biden and Democrats are not in a place where they can afford to play it safe or moderate in hopes of getting their critics and supporters to meet in the middle.
Student debt cancellation must be done in a way that offers relief to as many borrowers as possible. Offering just $10,000 of cancellation would be like taking half step forward when what struggling borrowers really need is a big leap. Biden must avoid income-based limits and an overcomplicated eligibility process which would water down any executive action. Rather than preventing well-off college graduates from benefiting from cancellation, means testing – putting a cap on eligibility or the amount of cancellation based on how much money one makes – would likely do more to limit the number of middle income families who benefit. Too often, means testing—in the context of student debt and beyond it—leaves families who are just above the income cap but still in great need of support, out in the cold.
Given the rising cost of living and fluctuations in employment we have all experienced in the last two years, using income as a measure for eligibility is bound to cause confusion and result in many people who should benefit missing out. We’ve already tried programs that set an income cap on student debt cancellation.Just last month, it was revealed that the Department of Education and the student loan industry had been miscalculating and deceiving borrowers about cancellation eligibility for borrowers in the Income Based Repayment program. It only serves to create more bureaucracy and stifle the power of a well intended policy.
Just look at the much maligned Public Service Loan Forgiveness program to see how overcomplicated forgiveness programs simply don't work. As a Policy Analyst at the Consumer Financial Protection Bureau, I spent years trying to help simplify and streamline the process of loan forgiveness for borrowers working in areas of public service. Despite outreach to employers, memos to the Department of Education and attempts to train student loan servicers, utilization of the PSLF program remains dismal. Now that I am no longer working in government and trying to navigate loan repayment like millions of others, I understand that, the truth is ain't nobody got time for that. Borrowers are focused on making their ends meet and doing the important work of caring for our children, grandparents and disabled siblings, and keeping our cities, schools and hospitals running. We do not have the time or capacity to go through a complicated application and certification process for cancellation of debt while also doing work to sustain our society.
From where I sit, as a former consumer debt advocate, community organizer and storyteller, the best and most strategic option is to go big and keep it simple. Capitulating to conservatives and moderate Democrats by taking a small, measured approach to debt cancellation would be a mistake. Relieving the debt burden of only a subset of borrowers will have a muting effect on this long awaited executive action that should be a lightning rod into the Democratic voter base. In fact, polls show that adding means testing to student debt cancellation makes it less popular among Black voters.
There is significant risk in conceding to conservative hand wringing about what’s “fair” to borrowers who already paid back their loans or the bad faith, slippery slope arguments about mass debt cancellation from people like Mitt Romney. We need only look at the impact of letting the Child Tax Credit payments expire last year. When the CTC payments were being distributed, Biden’s approval rating was near an all time high. The impact of failing to extend them has been swift and brutal. Today, five months into a year without those payments while pandemic challenges in school, child care and inflation persists, President Biden approval among young parents has fallen significantly.
Mr. President, this is just some free advice from a lifelong advocate for affordable education, waiting to celebrate your decision to right a decades old policy wrong, ensure that millions of families keep more money in their pockets, and inject a shot of enthusiasm to wray voters. Go Big and Keep it Simple. Dont f**k this up, Joe.
