AOC to those who paid off student loans: 'We can support things we we won't directly benefit from'

[Celerity]

89. fair enough, I have seen more than a few here in the past 18 months or so flat out-out say zero

forgiveness, not even 10K, and not even if it is capped via wealth, even after they admit that the amount paid by them, their total costs were staggeringly less than what a person nowadays has to pay. Some adopt the classic IGMSFY/drawbridge attitude of 'suck it up, buttercup' (paraphrasing) which is just maddening to see here.

The average total cost of a 4 year public bachelors degree is now over $100K. Also, when you are talking the non wealthy (which, in terms of sheer numbers of debtors, is the vast majority), black households are more impacted by student debt than white households are.



https://www.brookings.edu/research/student-loans-the-racial-wealth-divide-and-why-we-need-full-student-debt-cancellation/

snip

But a college degree does not eliminate the income gaps between white and Black workers. Black students finance their education through debt, and thus college degrees actually further contribute to the fragility of the upwardly mobile Black middle class. And because education does not achieve income parity for Black workers, the disproportionate debt Black students are taking to finance their education is reinforcing the racial wealth gap. Today, the average white family has roughly 10 times the amount of wealth as the average Black family, while white college graduates have over seven times more wealth than Black college graduates.

Most analysts believe there is a student debt problem in the United States, and even conservative scholars acknowledge some debt must be forgiven. Tuition is outpacing students’ ability to pay, and the share of students taking out loans to finance their degrees rose from roughly half (49%) to over two-thirds (69%) from 1993 to 2012, according to the Pew Research Center. Between 1993 and 2020, the average loan amount grew nearly three-fold, surpassing $30,000. Past discrimination should compel researchers and experts to seek solutions to the student debt crisis that center the experience of Black people. The Black-white wage gap is getting worse, while Black communities’ indebtedness is increasing. If we can create systems that recognize these lived experiences, we can create more equitable outcomes for everyone.

Figure 1. Changes in student debt and median income by race



A FOCUS ON INCOMES HIDES THE BLACK STUDENT DEBT CRISIS

Disagreement on the extent of the student debt problem tends to center on the positive correlation between educational attainment and income. Scholars who downplay the problem of student debt tend to assume that that relationship is causal, and that student borrowers are largely able to repay their loans out of the higher income their borrowing financed. However, too great a focus on income can lead researchers to wrongly assume that people with similar incomes have the same ability to pay back student loans.

Regardless of the incomes they make after graduation, Black households carry more student debt, which pushes down their creditworthiness. Unsurprisingly, then, Black people with a college degree have lower homeownership rates than white high school dropouts. Moreover, research from the Federal Reserve Bank of St. Louis finds that after college graduation, white households receive wealth transfers from their family to help pay for things like the purchase of a home. Black households, on the other hand, transfer their increased post-college income to help their family. Different patterns of intergenerational transfers contribute to nearly three-quarters of Black borrowers’ student loans having a higher balance today than they did originally.

Figure 2. Share of loans where current balance exceeds original



snip (much more at the top link)





Figure 3. Changes in median income and student debt, 2009 and 2019




Figure 4. Student debt-to-income ratio by income deciles, 2009 and 2019




Figure 5. Number of borrowers by loan amount and tract median income




Figure 6. Outstanding balance by loan amount and tract median income




Figure 7. Percentage of original balance remaining of borrowers who began repaying loans in 2012, by type of repayment plan




Figure 8. Share of current balances that exceed original, by origination year