Only Bernie Sanders is serious about cancelling your student loan debt

By Stephanie Hung

If you have been an elementary school teacher for the past 10 years and you decide to change careers to pursue your life-long passion in interior design, how would you do that? If you have been a mechanic fixing cars for a few years, but want to eventually become an automotive engineer, what would you do to achieve that goal? If you are a high school kid, and don’t know what you want to do next, where do you go to learn about the world and figure that out? “Higher education” comes to mind for most people.

Pundits and elected officials also sell higher education as the best means of upward class mobility. Getting a college diploma is viewed as the best pathway for achieving a middle and upper-middle class lifestyle. For the past several decades, students have most often cited the ability to get a better job as a “very important” reason for going to college.

Many of us see a college education as the key to making our dreams a reality. However, there’s a catch: colleges and universities across the U.S. cost tens, if not hundreds, of thousands of dollars, and the cost has forced millions of people into life-altering levels of debt. Politicians understand that there’s a problem, but none have offered real solutions.

Presidential candidate Sen. Bernie Sanders (I-VT) has a simple solution. Cancel the debt. All of it.

The American Dream?

While workers with college degrees are more likely to land jobs and earn more than their non-college-educated peers, the Federal Reserve Bank reported that only 37% of debt holders are able to pay their loans regularly. Under capitalism, where a person’s ability to live a decent life often depends on their value to an employer, higher education has become a means to an end—getting a well-paying job. Millions of Americans are chained down by debt: one in six owe money on student loans, with $1.6 trillion owed total. This amount is nearly twice as large as the U.S. military budget.

Instead of serving as a path to a better life for working-class people, higher education today often holds people back. Student loan servicers generally require a minimum payment each month. If borrowers default on their payments, the hit to a borrowers’ credit score may do significant damage: lower credit scores can make it harder to take out future loans, to rent an apartment, to buy a house, or to purchase a car. The Department of Education estimates that individuals with $20,000-$40,000 of debt have a repayment period of 20 years, and research has shown those with bachelor’s degrees take about 21 years to pay off their debt. (The average student loan debt per borrower in 2019 is around $29,000.)

According to a recent study by the Economic Policy Institute, student loan debt also significantly influences career paths. Those with higher education debt were more likely to accept jobs with a higher starting wage but slower wage growth over time, actually making it harder to pay off debt in the long run.

Higher education has been commodified — turned into a product to be sold for profit. For-profit colleges and universities often target low-income students of color, manipulating millions of people into taking out loans for substandard education. Even non-profit universities, increasingly run like corporations, are charging more and more: the average cost of a public college education rose 69% between 2000 and 2016.

The result is an economic and moral crisis. Sanders and fellow Democratic presidential candidate Sen. Elizabeth Warren (D-MA), have made this issue central to their campaigns. However, Sanders has the most ambitious plan and wants to hit the reset button on student loan debt.

The Good Kind of Cancel Culture

Sanders has proposed to cancel all $1.6 trillion in student loan debt for all borrowers, regardless of income or loan type. He plans to pay for this by imposing a tax on Wall Street transactions, which his campaign estimates would generate $2.4 trillion over the next decade. Warren’s plan would cancel much less, only $640 billion, and many people would still be left with substantial debt.

Sanders’s plan reflects the idea that student loan debt is a product of a broken system, which unjustly treats education as a source of profit for the wealthy. Democratic socialists like Sanders believe that college education should be guaranteed as a right to everyone, not treated as a commodity to wring profit from ordinary people.

Sanders has also proposed a College For All Act, which would also significantly increase funding for state, tribal, historically black colleges and universities, and other minority-serving institutions to reduce or eliminate tuition and fees. This would allow working-class students to not have to take on massive amounts of debt to go to school in the future.

The Benefits of Debt Cancellation

The student debt crisis has gotten so bad that a recent survey reported 39 percent of students drop out of college to avoid the burden of debt (although many of them already have some debt when they drop out). Debt cancellation, along with free public college, would likely increase the number of students who complete their college degrees.

A universal student loan debt forgiveness plan will benefit tens of millions of people. Student loan debt assistance was the most in-demand employee benefit of 2018. These people would be less bound to careers they chose in order to pay back student loans and employers they didn’t like solely because they offered student debt relief in their benefit package. Not only could workers have better working conditions or more fulfilling jobs, they would also have more financial freedom to enjoy other aspects of their life. Unsurprisingly, when private student loan debt was canceled, researchers found that borrowers moved, got jobs, and even made more money.

Cancelling student debt means helping people live where they want to and find well paying jobs. In other words, it means hugely improving millions of lives, including those of the working-class people who struggle most to pay back their debt.