PD Editorial: Student loan forgiveness must come with higher education reform

Higher education in America is broken. Young adults who wish to earn a degree that will prepare them to succeed in life wind up with soul-crushing debt. Forgiving some of those student loans won’t fix the system, but it will help millions of Americans and reduce racial inequality.

The fact that America values higher education is not in question. States subsidize public universities and colleges because the graduates of those institutions become teachers, business leaders, scientists, doctors and other professions that require advanced training. They contribute tremendously to the economy and the wealth of the nation.

They are not alone. People without degrees provide essential services and labor that keeps America working. They just don’t usually wind up with massive student loan debt as part of their training.

The days when a family could save and a student could make up the rest with a work-study job in the cafeteria are long gone.

State support for public colleges and universities has waned in recent decades. Tuition and other costs, in turn, have skyrocketed. The same has been true at private schools, just without the excuse of declining public support. The average cost to attend college has more than doubled just in the 21st century.

As costs have increased, so has the amount of debt that students take on. Today, about 45 million Americans owe a combined $1.8 trillion from student loans. The average borrower owes $29,000. Students of color and from low-income families hold disproportionately large loans and often struggle more to pay them back.

Making monthly payments on that much debt can be financially crippling to someone entering the workforce. It can be crippling to someone who has worked for years as interest accumulates. Money that might go to saving for a down payment on a house or a new vehicle goes on hold.

During the pandemic’s economic upheaval, the Trump and Biden administrations froze payments and interest on student loans. That suspension is due to end Aug. 31.

The freeze did not address the bigger problem of overwhelming student loan debt. It was only a temporary and necessary reprieve during an economic and societal crisis.

President Joe Biden campaigned on a pledge to take more direct action by forgiving some amount of student loan debt. Reports are that he will act before the August deadline. If Washington rumors can be believed, he will waive $10,000 for loan holders who earn less than $150,000 single or $300,000 joint.

Those caps could be lower. Couples earning six figures ought to be able to pay back the loans they took out. There ought to be some demonstration of financial need built into forgiveness.

Blanket forgiveness is not the only relief available, of course. Borrowers also may participate in a federal public service option that results in loan forgiveness.

If Biden delivers, however, the underlying problem of higher education costs will remain. As long as college is so expensive, students will accumulate debt. In a few years, there will be a clamor for another round of forgiveness once this precedent is set. Structural change is necessary. It will take time and money, but it will also create an environment in which higher education is attainable without digging a deep financial hole.

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