Relief through student debt cancellation will help workers today
Mr. President: do you want to be the most pro-worker and pro-union president?
My advice is simple: cancel student debt.
Americans collectively owe $1.6 trillion in federal student loan debt, affecting nearly 43.4 million American workers. The student debt crisis is fueled by a cycle of suppressed wages, demand for higher credentials and rising costs in the pursuit of an education.
As a union organizer and former chief workforce officer for the state of Michigan who spearheaded Michigan’s No Worker Left Behind program, I’ve seen firsthand what access to affordable education and job training can do to uplift workers and our economy. However, that opportunity ceases to exist in a system where growing student debt prevents workers from fully participating in our economy—buying homes, changing careers, even starting families.
Studies indicate that 60 percent of all jobs in the U.S. economy require postsecondary education and training beyond high school. Research from the Bureau of Labor Statistics suggests that a bachelor’s degree is typically required for entry in 169 occupations.
Thinking they were investing in their future, millions of U.S. workers have gone back to school or pursued a college degree. In 1960, roughly 7.7 percent of the U.S. population had graduated from college. Now more than 37.5 percent of U.S. workers aged 25 and above have at least a college degree.
But as students have graduated, they have entered a job market where wages are outpaced by tens-of-thousands in student loan debt. Over the past 40 years, wage growth for a typical worker was 23.1 percent, compared to a 169 percent increase in the cost of a college education in the U.S. In this world, investment in a higher education far too often is not paying off. Add to that that roughly 40 percent of workers with student debt were unable to finish their degree.
Wage growth for Black and Hispanic workers over the past 40 years also lagged behind wages for white workers, growing only 18.9 percent and 16.7 percent respectively.
Black workers are also more heavily impacted by the student debt crisis, owing an average of $25,000 more in student loan debt than white college graduates. Black women stand to benefit the most from debt cancellation, holding the highest average debt amount among all demographics.
This crisis extends beyond age or generation, with the fastest growing population of student debt carriers being Americans aged 65 years old and older.
Student debt cancellation isn’t just a “young person’s” issue as we so often hear. It’s an economic, workers’ rights, racial justice and gender equity issue spanning generations.
While we must have a full recalibration of our nation’s higher education policy to ensure college is once again affordable in the long term—and I’m proud to lead the America’s College Promise Act that will do just that and provide two years of free community college to every single American—immediate relief through student debt cancellation will help workers today.
This is relief people will feel immediately. It will lift millions of workers out of debt and give people across the country a pathway to financial stability to buy a house, change their career, get married and have kids. In the medium term, it will help grow the economy and empower workers by allowing them the freedom to compete for better jobs.
It is no longer a question of whether student debt should or can be cancelled. Poll after poll has indicated that Americans want student debt relief. And President Biden and the Department of Education have already exercised their authority to cancel student debt, cancelling roughly $17 billion for students defrauded by universities and beginning to fix a broken Public Loan Forgiveness Program.
It is now a question of when student debt will be cancelled.
For workers across the country, we must cancel student debt boldly. Cancelling $50,000 will make 76% of current borrows debt-free, transforming lives and delivering the biggest racial justice impact.
Means-testing student debt cancellation is also unnecessary and costly. The majority of federal loans are held by workers with no household wealth at all, with 97 percent of all student debt being held by people earning below $150,000. There is nothing to means test.
For families being crushed by higher costs as inflation soars, we must do it now.
Mr. President, the ball is in your court and this crisis can be solved with a stroke of a pen. The American people are counting on you.
Andy Levin represents Michigan’s 9th District. He is a member of the Education and Labor Committee.