Debt relief has public support, but will it be enough?

The political debate over whether President Biden should cancel some or all of the $1.7 trillion in student debt currently owed to the federal government is largely centered on perceptions of the role government should play in making higher education affordable and accessible.

Although the debate is sharply divided between party lines in Congress, public perception has largely changed in recent years. Currently, one in five voters favors widespread cancellation. Young voters, however, are an exception. Existing in a world of skyrocketing tuition, record inflation, stagnant wages and the growing need for a college degree, 71% of voters under 34 support some form of loan forgiveness, including a majority – 56% – of young Republican voters, according to a 2022 survey.

The increased attention to the role of the federal government in higher education is new, say higher education experts, and follows a rapid shift in public opinion that the government should play a greater role in helping students cover college costs. That shift, followed by presumed economic gains from Biden’s impending decision on student debt, could serve as a catalyst for a stronger federal role in tackling the high costs of a college education.

“I think when we cancel the debt… [it] is a way for the government to say we made a mistake as a government, we are making a mistake with student loans, we are acknowledging that mistake, we are canceling those debts. It is an acknowledgment that student loans are not a viable way to pay for higher education in the future,” said Charlie Eaton, professor of sociology at the University of California, Merced.

How we got here

The evolution of public opinion that informs the debt relief debate is largely influenced by a better understanding of the impacts of debt, financial difficulties in the face of developments in the global economy and recent changes in the role the federal government has played in addressing financial hardship, particularly during the COVID-19 pandemic.

According to who should pay by Brian Powell, professor of sociology at Indiana University, and Natasha Quadlin, assistant professor of sociology at the University of California, Los Angeles.

“There are very few instances in which public opinion has changed so quickly in such a short time,” Powell said.

The authors found that in 2010, an overwhelming majority of Americans — 80% — believed it was primarily the responsibility of students and parents to bear the cost of college. On the other hand, 27% thought the cost of a college education should be a shared burden between individuals and the government. The authors found that this trend has been consistent since the 1980s.

However, between 2010 and 2015, something changed: there was an 18% increase in public belief that the government should play a role in helping students pay for their college education.

Powell noted that while many still believed that students and parents should have primary responsibility for paying for college, this change demonstrated growing public support for a stronger federal role in helping students pay for college.

“If any of these issues related to debt relief came up in 2010, public opinion would be absolutely against it,” Powell said. “People have increasingly gravitated towards this idea that government should be responsible or that government should be in partnership with parents and students. So that means the public is currently receptive to plans to make college affordable.

According to Powell, the shift in public opinion can be attributed to multiple factors, including new pressures on the economy and a growing number of Americans realizing the value of a college degree, as well as rising costs of education. ‘Higher Education.

Additionally, the public is more aware of student debt and the normalization of debt to be able to afford a college degree.

“Tuition fees have skyrocketed over the past decade, along with wages that have stagnated, plus a double effect of people having a hypervision of who owns the debt, as there are more people who have debt and need to go into debt,” said Braxton Brewington, a spokesperson. for the Debt Collective, said all of this has had a great effect in pushing higher education up the national agenda.

Between 1993 and 2012, the number of students who took out loans to pay for their college education and the amount borrowed increased dramatically. A Pew Research Center study found that in 1993, 49% of students took out loans. By 2012, that figure had risen to about 69% of students who took on debt to pay for their college education.

According to federal dataone in five Americans have student loans, but most borrowers have relatively low debt, with 53% of borrowers holding less than $20,000 in federal student loans.

Young Americans hold student loan debt disproportionately compared to older Americans. Looking at individuals aged 18-34, 57% had student loans, compared to 16% of those over 50. These young Americans also face a 40% increase in tuition fees in public four-year universities over the past decade.

“The big publicity about student debt has made people much more aware. A lot of people are much more receptive to the idea that you can’t just rely on the individuals themselves,” Powell said. “The issue of student debt is one of the very reasons people have become more receptive to the idea of ​​government structuring.”

Brewington says heightened public awareness of racial inequality in recent years has also played a role.

For black borrowers, whose wealth accumulation is disproportionate to that of white borrowers, the impacts of student debt are more severe. A study conducted in 2019 by The consumer newspaper found that student debt accounted for 3-7% of the racial wealth gap in 2016.

Recent actions by the federal government have also heightened public awareness of the economic implications of federal action to deal with economic hardship.

Experts noted that the expansion of the federal government’s role in health care coverage following the passage of the Affordable Care Act in 2010 provided an example of how the federal government could meet the costs that Powell called health care “bread and butter” issues. and education.

Besides, broad public support for the Trump and Biden administrations’ pause on student loan repayments and the universal distribution of stimulus checks to help ease some of the financial burdens caused by COVID-19 also helped, experts said. Biden’s recent actions on student debt — his administration has already written off $18.5 billion owed to the federal government — are also significant. These include changes to the government’s student loan forgiveness program and the waiver for people with permanent disabilities.

“We’ve had a preview of what the massive rollback of the expansion of the Public Service Loan Forgiveness Program and fixing some of the issues with it will look like,” Eaton said.

The potential economic impacts of debt cancellation have also entered the national debate. Treasury Secretary Janet Yellen said in May that student loan relief would benefit the economy, especially for low-income people.

“Student debt is a huge burden for many people, especially those who find themselves on low incomes,” Yellen said. “[Student loan relief] could be good for the economy.

Although Biden’s final proposal is still unknown, debt relief of $10,000 per borrower, which was one of the president’s key campaign promises, could bring economic relief to more than 15 million people, according to 2021 data from the Ministry of Education.

The political climate

Ideas about government accountability inform the current debate in Congress about debt relief. However, it also comes with intense polarization over whether Biden can use executive power to clear debts owed to the federal government.

Most Democrats have largely supported the idea that Biden has the power to write off student debt, however, Republicans have argued that such executive power does not exist.

Republicans, while disagreeing with the concept of debt relief overall, believe Biden should go through Congress to cancel the debt. Congressional staff and higher education experts expect a backlash from Republicans when Biden announces his plan to tackle student debt. Already, a coalition of Republican senators introduced a bill it would prohibit Biden from canceling student debt. Experts say those efforts will likely die due to the lack of a Republican majority in Congress.

In the public eye, polarization and dysfunction in Congress could inform a general consensus that Biden should be the one to act.

“I also think it has something to do with a growing understanding of congressional dysfunction. So I think that also ties into a request or a call for Biden to act,” Brewington said.

Higher education experts believe that increased public awareness of student debt relief could push other issues related to higher education affordability onto the national agenda, acting as a catalyst policy that could increase the role of the federal government in covering the costs of higher education. This includes changes to the student loan system itself, which many higher education leaders have long called for.

“The gains from blanket loan forgiveness will soon disappear, like water poured into the sand, unless we ask and answer some basic questions about the design of federal student loans,” said Terry Hartle, Senior Vice President of Government and Public Relations. business at the American Council on Education.

Hartle said the reauthorization of the Higher Education Act, which governs the federal student loan system as a whole and was historically regularly reviewed by Congress, has been thwarted by increased polarization in Congress and, as a result, the legislation has not been updated since 2008.

“It’s less of a political debate and more of a political question,” Hartle said. “As long as this remains a political food fight, it will be difficult to have a discussion about good public policy that will help students and be fair to taxpayers.”

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John A. Bogar