Inequality of student loan debt underscores possible Biden policy shift

The Hill ^ | November 28, 2020 | Marty Johnson

[karpov]

The potential forgiveness of student loan debt could be one of the biggest policy shifts in the first months of the incoming Biden administration.

President-elect Joe Biden has said that student debt forgiveness will be a key part of his economic agenda, though how and to what extent the loans will be forgiven has become a point of debate among Democrats.

...

It’s not known what percentage of that belongs to students of color, but a study from the Consumer Financial Protection Bureau in 2016 showed that 90 percent of Black students and 72 percent of Latino students take out federal loans when paying for college, compared with 66 percent of white students.

A 2019 analysis from the Federal Reserve Bank of New York showed that the default rate on student loans majority-Black or majority-Latino zip codes were 17.7 percent and 13 percent, respectively, both higher than the 9 percent default rate in majority-white zip codes.

And a study from Brandeis University’s Institute on Assets and Social Policy found that “twenty years after starting college, the median debt of White borrowing students has been reduced by 94 percent—with almost half holding no student debt—whereas Black borrowers at the median still owe 95 percent of their cumulative borrowing total.”

All of this, coupled with the fact that amid the pandemic, unemployment rates for Black and Latino Americans remain higher than the national average, could see the student loan debt crisis snowball come January.

Approximately “22 million borrowers will have to resume their payments,” Andrew Pentis, a certified student loan counselor who writes for Student Loan Hero, told The Hill. “The vast majority of the eligible federal loan borrowers did take advantage of this break in the sense that they did not make payments.”

[karpov]

Blacks and Hispanics are less likely than whites to repay student loans, which somehow constitutes an injustice towards them. This justifies forgiving student loans? Instead, we should end government-guaranteed student loans, which would force colleges to cut costs.

[stanne]

Any white kid with a scholarship is a rare bird.

[Texas Eagle]

It’s not debt forgiveness. It’s debt transference. As in, it gets transferred to the taxpaying public. The colleges and universities get the money before the student who didn’t learn a damn thing in the college or university gets a chance to default on it.

[econjack]

This program should require a payback of all sums with interest. My daughter-in-law was a nurse by training but then decided to go to law school, using a student loan to pay for it. She specializes in health law. In her first case, she won and her share of the settlement was more than I earned in my last 6 years of college-level teaching. Even though she is family, why should my tax dollars pay for her education when she reaps the financial rewards?

[jeffc]

Forgiving Black and/or Hispanic student loans and not White's would not pass muster at SCOTUS, as it is obvious racism.

Also, what about student loan forgiveness for Black kids from wealthy parents versus student loans of lower-income White kids?

[kingu]

The hell you say? Looking at various social media platforms, the ones whining about hundreds of thousands of unpaid student debt are almost universally young white people who don’t want to give away half their salary to pay for their education.

I very rarely see a person of color do it, and almost never see it about ‘my degree in civil engineering...’

[ransomnote]

Inequality of student loan debt underscores possible Biden policy shift

~~~~~~~~~~~~~~~~~

Biden doesn’t have policies; he has handlers.

He won’t need policies; he’ll need lawyers. Lots of them.

[DYngbld]

I wonder if my Daughter will get reimbursed for her tuition that she worked for and paid cash? We won't hold our breath.

We are so proud of her for graduating with out student debt, I guess that was the wrong decision.

[Gene Eric]

Exactly. And students need to wake up to that fact.

[Texas Eagle]

Poetic justice in a way. The students who had their loans “forgiven” by Soetoro will now pay for the loans “forgiven” by Biden (if he somehow ends up successfully stealing the office).

[rktman]

In that case, Mrs rktman DEMANDS a refund for payment in full of her college loans. In today’s dollars.

[ladyjane]

the ones whining about hundreds of thousands of unpaid student debt are almost universally young white people ... I very rarely see a person of color do it,

You want to complain about the kids who are whining? Why aren't you complaining about the kids who won't pay their debts?

[madison10]

Same here, and my spouse’s, too.

[sloanrb]

Here’s an idea: have the government seize the endowments of these schools to pay back the amount the schools overcharged on tuition.

I am not a fan of the government seizing assets, but in this case the money originally came from the student loan program. Some schools have millions of dollars in their endowments.

Also they can stop overpaying the faculty. Some of the higher ups make over a million a year in salary.

[Brian Griffin]

The university I graduated from has tuition of over $50,000/year nowadays.

I can’t imagine that even a third of “white” students there have their parents pay the full amount.

My first year tuition was $3,300/year and I took out both a federal NDSL and a private bank student loan to pay it.

[Brian Griffin]

“hundreds of thousands of unpaid student debt are almost universally young white people who don’t want to give away half their salary to pay for their education”

There is a 15% of income capped repayment program for federal student loans I believe. This program is in some cases worthwhile.

[CurlyDave]

....And a study from Brandeis University’s Institute on Assets and Social Policy found that “twenty years after starting college, the median debt of White borrowing students has been reduced by 94 percent—with almost half holding no student debt—whereas Black borrowers at the median still owe 95 percent of their cumulative borrowing total.”...

At the risk of being politically incorrect, think back to the days when banks would "redline" minority neighborhoods and not make mortgage loans there.

Is there any possible correlation?

[Brian Griffin]

https://financesonline.com/student-loan-statistics/

[AbolishCSEU]

Language warning 1:14
https://youtu.be/vxs5fuVHJyI

[Brian Griffin]

https://studentaid.gov/app/ibrInstructions.action

Note that income-based repayment if often not a good idea.

https://studentaid.gov/loan-simulator/

Be very careful in matters involving student loans.