U.S. President Joe Biden attends a CNN City Hall at the Pabst Theater in Milwaukee, Wisconsin, Feb. 16, 2021.
SAUL LOEB | AFP | Getty Images
“We need student loan forgiveness in excess of the potential $ 10,000 your government has proposed,” Jocelyn Fish, a community theater marketing director, told President Joe Biden at CNN’s presidential town hall Tuesday night. “We need at least $ 50,000. What are you going to do to make that possible? ‘
“I won’t let that happen,” the president replied.
Biden went on to say that there was no point in using money to cancel the student debt “ for people who have gone to Harvard and Yale and Penn. ”
The exchange quickly confused progressives, attorneys and student loan borrowers who have called on Biden to increase the amount of debt forgiveness from $ 10,000 to $ 50,000 and to cancel the loans through executive action.
Proponents also point out that it is largely a myth that people with student debt – especially those who struggle with it – have the benefit of a prestigious education.
“The vast majority of students who graduate from the elite schools the president named at CNN City Hall graduate with a zero student loan,” said Eileen Connor, director of disputes at Harvard Law School’s Project on Predatory Student Lending.
Indeed, only 0.3% of federal student borrowers attended Ivy League colleges, according to estimates provided to CNBC by higher education expert Mark Kantrowitz.
More from Personal Finance:
What different amounts of student loan forgiveness could mean?
Student borrowers with private loans get little relief from the Covid era
Plan to cancel $ 50,000 in student debt would help 36 million
“The Ivy League colleges are just eight of more than 6,000,” Kantrowitz said. “Ivy League colleges also have ‘no loans’ financial aid policies, which significantly reduce the percentage of students who borrow.”
The president’s statements suggested he still hasn’t gotten around to a broader plan for student loan waiver as his progressive rivals in the Democratic Primary are championing. (Biden has said he is in favor of $ 10,000 in forgiveness and more for those who have attended public colleges and historically black colleges and universities.)
His comments also reflected arguments made by Republicans and some moderate Democrats that student debt cancellation is an award for Americans with fine college degrees.
“If you collected $ 100,000 to study poetry at Bowdoin, and then ended up selling coffee at Starbucks, you might regret some of your choices, and I feel sorry for you, but I’m not sure why you’re getting $ 50,000 The taxpayer’s check, ”said Rick Hess, director of education policy studies at the American Enterprise Institute.
Yet only 12% of student loan borrowers went to highly selective colleges and universities, Kantrowitz found. About a quarter of borrowers come from private non-profit colleges.
But the vast majority of borrowers – 49% – came from public colleges.
“Public colleges aren’t cheap,” Kantrowitz said, adding that it still costs more than $ 22,000 a year to attend one, including tuition, room, and board.
Meanwhile, another quarter of borrowers went to for-profit schools, which have come under fire for misleading students about programs and career outcomes, and for preying on veterans and people of color. Nearly half of those who take out student loans in these schools default.
“Wealthy students attending ‘elite’ schools typically have no problems,” said Ashley Harrington, federal advocacy director at the Center for Responsible Lending.
“We need to look at what is really happening with this crisis and on who the consequences are actually being affected,” said Harrington. “Student loan debt has a disproportionate impact on people with low incomes and wealth [and] Black and brown people struggle the most. “