Perspective: Sen. Elizabeth Warren introduces a new proposal to significantly lower student debt. The extent of college debt in America clogs the economy and is racially unjust. The Democratic presidential contender has a bold idea to reduce it.
Students walk on the campus of Miami Dade College in Miami. By Jared Bernstein Jared Bernstein Bio Follow Jared Bernstein, a former chief economist to Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of 'The Reconnection Agenda: Reuniting Growth and Prosperity'. April 22 at 11:28 AM When it comes to offering polices that target American inequality, Sen. Elizabeth Warren is on a tear.
Why not just cancel all student debt and be done with it? Because, as journalist David Leonhardt argues, that’s not as progressive an idea as it sounds. The problem is that the “the highest-earning quarter of the population holds about half of all student debt...[w]hich means that universal student debt cancellation would be a giant welfare program for the bourgeoisie.”
According to the Brandeis and other researchers, Warren’s proposal would, by reducing the indebtedness of minority households with student loans, significantly raise the ratio of black/white wealth in such households from about 3 to about 28 percent, and the white-Latino gap from 54 to 81 percent. In fact, while the student debt problem is invariably described as a “crisis,” some experts view such labeling as overwrought. Higher education expert Sandy Baum, for example, convincingly argues that even with the debt they’ve accrued, most college grads “…are better off than they would have been if they hadn’t borrowed and hadn’t gone to college.” And there’s compelling evidence that even with loans, investment in higher ed reliably pays off in terms of future earnings.
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