Research has shown again and again that college pays off. The irony of the debate over student debt cancellation is that the degree itself puts most college graduates in a pretty good position to pay off the loans they took out to pay for the degree. However, the cost of college and total student loan debt have been rising for decades. Total student loan debt, which recently surpassed $1.7 trillion, poses a considerable hurdle on millennials’ path to economic independence and financial security. Student debt relief has become a priority in political discourse as more students are shouldering an unmanageable debt burden.
Canceling some amount of student loan debt across the board would promote racial, gender, and economic equity among college graduates, and it would aid adults who were unable to finish their degrees or earn enough to make loan payments. However, a broad student loan cancellation program would direct more of the funds to higher-income college graduates who can afford to pay off their loans. Instead, Congress could promote equity by focusing relief on students who need it most. It could limit debt cancellation to undergraduate student loans because holders of graduate degrees generally earn high wages. For those who don’t have a degree, it could provide a set amount to fund future education or training.
It’s unclear whether student loan debt cancellation will be enacted or what form it would take. In the meantime, several other policy proposals could make a difference: improving transparency and accountability in higher education, providing career counseling to students as early as middle school, and automatically enrolling students in income-based repayment plans.
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