The Biden administration’s plan is an important step that will make a real difference in many people’s lives.
The White House estimates that about 20 million of the nation’s roughly 43 million student debt holders will see their entire balance canceled.
Despite this considerable impact, the plan is still limited. I hope it’s just the beginning in much-needed policy conversations about debt and education in the United States.
For one thing, Biden’s plan cuts less than 20% of America’s $1.75 trillion student debt tab.
In addition, the income cap of $125,000 focuses on borrowers’ socioeconomic class while ignoring the roles structural racism and sexism play in terms of who borrows and how much.
For example, Black women borrow about $38,000 on average to finance their education, compared with $30,000 for white men. And because interest on student loans quickly accumulates, most Black female borrowers still owe their original balance 20 years after enrolling in school. By comparison, most white borrowers have paid off their loans within that time period.
The Biden administration will have to do more if it aims to adequately address these and the many other remaining structural problems with debt and education.