b&b210: Cancelling Student Debt
1 in 6 Americans have student loan debt. Federal Student Loan Debt has risen to $1.5 trillion. The average student loan debt is close to $40,000 now. Every year, the debt creeps higher.
Several of the Democratic Presidential Candidates have proposed plans to cancel all or some student loan debt. What would the affect of doing so be? Would it help the racial wealth divide? Is a college degree worth so much?
Pam: It’s $1.5 trillion of student loan debt and climbing. The average student loan debt is almost close to $40,000 now. It creeps up every single year. So it is a problem. 1 in 6 Americans have student loan debt, and it is a debilitating amount of debt.
Pam: I work with so many clients who have student loan debt and they’re making $60,000, $70,000, $80,000, they’re on these income driven repayment programs, and $400, $500, $600 is coming out of their account every month, and it’s not even covering the interest on their loans. So, their loan balances are not going down, their jobs are not giving them the raises they need, and every time they get a raise their loan payment goes up.
Pam: White Americans who have no higher than a high school diploma still have higher net worth than Black and Latinx Americans with a four year college degree. So, education was not the answer to closing the racial wealth gap, and particularly it’s due to the fact that student loans leave people with an upside-down net worth, especially in the early years of their career. And so we are in a place now where student loan debt has widened the racial wealth divide in a way that no one was really anticipating, because of how expensive going to college really was.