A Response to Frederick Hess on Student Debt Cancellation
By Kyle Southern
Last week, American Enterprise Institute Director of Education Policy Studies Frederick M. Hess responded to a letter from Young Invincibles and more than 230 other organizations calling on President-Elect Biden to use authority under current law to order broad cancellation of student debt. Although I don’t have any interest in a sparring match with Hess, in this instance–in which Hess names YI as a purveyor of “vapid pronouncements”–a record-correction seems in order.
First, Hess is right about one thing: While broad student debt cancellation would be a landmark event, it would not bend the cost curve of higher education for the future.
That’s why YI and many other groups have advocated for a robust partnership between the federal and state governments to fill revenue lines for public institutions, historically Black colleges and universities, and minority-serving institutions. Increased, ongoing federal investment would prevent repeating cycles of budget busts for institutions through economic downturns and reflect the basic principle that higher education is a public good requiring public investment.
It’s why we worked with other groups to produce a First 100 Days plan for the new administration that covers a range of congressional and executive actions to better support young people across educational attainment levels.
It’s why we spent the summer and early fall holding conversations with policy experts, higher education leaders, researchers, and young advocates to inform 40 policy recommendations we released yesterday in The Path Forward set of policy papers.
Hess argues against broad student debt cancellation in part because of benefits that could go to relatively high-earning professionals with graduate school debt. In sounding this alarm, however, Hess ignores the profoundly gendered and racialized burden of student debt. Women hold two-thirds of the country’s student debt and, on average, borrow $3,000 more than men to attend college. Wage gaps, however, mean women find it harder to repay their loans.
As our colleagues at Demos have found, “The typical white male borrower has paid off 44 percent of his loan balance 12 years after beginning college, while the typical Black female borrower has seen her balance grow by an additional 13 percent. Over half of Black male borrowers default on a loan within 12 years of beginning school.”
It’s hard to buy Hess’s argument that such disparate effects of borrowing on Black Americans can only be attributed to irresponsible levels of borrowing. Often, higher debt burdens borne by Black borrowers–including, yes, those who pursued graduate education–are taken on in recognition of the wage disparities that exist in the workforce that require Black employees attain higher credentials to earn comparable income to their white colleagues.
Various debt cancellation plans include approaches that would weight cancellation toward lower- to middle-income borrowers, phasing out forgiveness at certain income caps. Any policy action must balance equity considerations with a guiding principle of universality. This nuance, too, is absent from Hess’s critique.
Hess’s most forceful charge, however, comes in claiming student debt cancellation would “represent a casual assault on the foundational virtues that sustain American prosperity and comity.” But the assault on public higher education financing in this century has been anything but casual. Sooner or later, we as a society must account for the bad policy choices that have yoked young people with this generational debt. Then we must turn our full attention toward rehabilitating and investing in the public good mission of higher education for the decades ahead.
Ultimately, here at YI we are accountable to the young people whose voices and interests we have a mission to amplify–not to naysayers who dismiss their lived realities. The lessons from listening to such voices in response to the last Great Recession have become all too clear. And the cost we as a nation truly can’t afford is to listen to them again.
Dr. Kyle Southern is Policy and Advocacy Director for Higher Education and Workforce at Young Invincibles.