Last month, President Biden announced his plan to erase $10,000 in student debt for borrowers who earn less than $125,000 per year, with an additional $10,000 for Pell Grant recipients, a form of aid awarded to low-income families with exceptional financial need.
Student debt cancellation is perhaps the greatest acknowledgment from the federal government in decades that every American citizen is worthy of a college education. Along with their monthly payments being cut in half and interest rates lowered, 20 million borrowers will have their remaining balance wiped out.
But if you listen to the conservative American Enterprise Institute, student loan cancellation is just “a massive wealth transfer from working class Americans to people who are the Democrat voter,” what they call “the urban elites.” That couldn’t be further from the truth.
The student debt crisis impacts more than 45 million Americans, disproportionately women and people of color. The Institute on Assets and Social Policy estimates that “20 years after starting school, the typical Black borrower owed about $17,500 more than their White peers.” Biden’s limited relief is also extremely targeted, with “nearly 90 percent of relief dollars [going] to those earning less than $75,000 a year.” Not very “elite.”
Millions of borrowers do not live in metropolitan, coastal cities. According to a study from the Student Borrower Protection Center, nearly 6.5 million rural Americans owed an average of $35,000 in student loan debt at the end of 2020. Around 1.1 million of those borrowers have fallen into default. Borrowers in the states with the most rural areas in the country—Wyoming, Vermont, Montana, Mississippi, and South Dakota—default at a significantly higher rate than those in other states.
In rural areas, too many young borrowers find themselves without employment and forced to make choices for themselves out of necessity, rather than self-fulfillment. According to the Federal Reserve Board, “high-balance borrowers seek higher wages in metropolitan areas” and are forced to leave their home communities behind.
I understand the struggle facing rural Americans firsthand. I had the great fortune of receiving my bachelor of arts degree from Colgate University, a small liberal arts college in the village of Hamilton, N.Y.—but tuition, room, and board came with a price tag of approximately $70,000 a year. To be clear, that is more than my family’s entire annual income, not to mention the median income in my home county in upstate New York, where only a quarter of the residents hold a degree higher than a high school diploma.
But because of my single-parent household, lifelong medical disability of severe ulcerative colitis, and strong academic record, I was provided with significant financial aid as an escape route from the daunting choice facing so many of my peers from lower-middle-class families: Do you risk your financial future—often prior to adulthood—by accepting gargantuan student loans that it could take decades to pay off? Several of my high school classmates dropped out of college, not because of lack of motivation or academic readiness, but because their loans were simply too large for their families to rationally move forward.
While some rural Americans believe that traditional career paths of manual labor and microscale services are underappreciated in a globalized economy, many, like my younger self, still hold fast to the promise of an education as the pathway to the gloried American middle class. As black lung, cancer, and physical injuries compel more Appalachians to leave the mining industry, will we limit their options because of the deceptive rhetoric of mainstream journalists and corporate executives who endlessly lambaste any federal policy that eases the burden of the student debt crisis? Will we assume that Midwestern corn farmers, if offered a fairer financial deal, would turn down an opportunity to earn a plant sciences degree from their local community college, when over half of young farmers are currently struggling to pay their student loan debt?
Federal student loan cancellation is not a wealth transfer from the bottom to the top. Neither is it an attempt to inform rural Americans that their career paths of choice, often grounded in obvious geographic and economic factors, are lesser or inconsequential. It is, in fact, a recognition from our government that education is the best tool available for human beings to improve the conditions of our own lives, to provide for those who we love most, and to leave the world in a better place than when we inherited it.