US Should Cancel All Student Debt
Renowned educational reformer Horace Mann said in 1848: “Education, therefore, beyond all other man-made devices, is a great equalizer of the conditions of men – the pendulum of the social machine. Many reformers have used similar language to express variations of this idea, including that education is the civil rights issue of our time.
They were lying.
A person’s wealth has always strongly influenced the quality of the education they receive. Wealth is the total sum of all assets held minus debt held – a person’s net worth. People who have enough wealth to pay for their college education out of pocket, start a business, and buy a house are much more likely to attend better performing schools, go to college, and hold political office. People with little or no wealth, on the other hand, too often have to go into debt to pay for their education, which can put them even further behind economically.
In other words, education cannot predict wealth; wealth predicts for education. The promise of education as an equalizer will always be wrong unless we actively seek to change the wealth gaps in this country and cancel student debt.
As more and more students take out larger loans, the student debt crisis – and proposals to alleviate it – has gained greater prominence in national political debates. However, if we don’t focus on those who have been most affected by this crisis – the people who have been denied wealth – we could make matters worse. Currently, the median net worth of a white household is 10 times more than the median net worth of a black household.
Federal student debt cancellation and free universal public college are examples of programs that, if passed, would not need means testing to have ameliorating effects on the racial wealth gap. Such universal programs would prevent black students from going into debt in their attempts to achieve the American dream.
We come to this conclusion based on the results of a new report from the Brookings Institution, “Student Debt Cancellation Should Consider Wealth, Not IncomeWhich I co-wrote with Carl Romer.
Critics of universal student debt cancellation often focus on the supposed injustice of canceling loans from high-income professionals, ignoring the fact that many black families have incomes comparable to their white peers, but have much lower wealth due to past discrimination.
Some Argue that debt cancellation is a regressive policy that unfairly and disproportionately helps the already wealthy at taxpayer expense. But these general critiques often miss three key details of the job market. First, while people with student loans have higher incomes, a American Economic Association study have shown that they do not have statistically higher hourly wages, suggesting that student debt forces loan holders to work longer hours. Second, student debt drives graduates to choose their jobs less passionate about and far from public interest careers offering lower wages than working in a company. Third, recent graduates with student debt hold jobs that have higher starting salaries but lower potential salary growth, Journal of the economics of education.
This country needs a highly educated population to move society forward. The richness of reading, writing, and conversing with others in college can propel individuals to unimaginable heights. Our economy needs efficient workers to maximize GDP, artists who unleash our imaginations, researchers who can see the big picture and make leaps in scientific and technological innovation, and journalists who can ask for questions. accounts to governments and businesses. Individual and societal prosperity is certainly linked to education.
But, as higher education levels lead to greater wealth, our country’s economic and social progress will be hampered if we do not try to close the racial gaps associated with student debt that continue to hold back too many people. Blacks and Maroons, it doesn’t matter. how far they move up the academic ladder.
The racial achievement gap is fueled by the wealth gap. Reforming education without restructuring the way wealth is distributed is like trying to cure sick fish in a poisonous lake.
If we really want all kids to get a quality education, go to college, and live their best lives, then we should do all we can to increase the net worth of low income students in high poverty districts. while providing them with a quality education. . This can be done, generally, in three ways. First, increase the assets people own (homes, businesses, 401K). Second, to a lesser extent, eliminate certain debts (student loans, hospital bills, credit cards). And finally, eradicate the racism that extracts value and wealth from Blacks and Maroons.
Our report shows that debt cancellation can be part of the solution. To examine the effects of different debt cancellation policies, we plotted the net worth and wealth percentile of black and non-black households. By looking at household net worth at each wealth percentile, we show that debt cancellation drives wealth up the distribution. This change is disproportionately helping black households that are poor in wealth.
Education reform in this country has painstakingly tried to fix people instead of trying to resolve the racial wealth gap. It’s by design. Education reformers claim to want a more egalitarian system, but they have made little headway because they have yet to attack the racial hierarchies that are inextricably linked to wealth and that no education can resolve.
Andre Perry, Ph.D., is a David M. Rubenstein Fellow at the Brookings Institution. Perry was the founding dean of urban education at Davenport University in Grand Rapids, Michigan. Previously, Perry worked in both academic and administrative capacities, most notably as CEO of the Capital One-University of New Orleans Charter Network, which consisted of four charter schools. in New Orleans. Perry got his doctorate. in Educational Policy and Leadership from the University of Maryland-College Park.
This review was produced by The Hechinger report, an independent, non-profit news organization focused on inequalities and innovation in education.
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