Putting a Band-Aid on a Giant, Seeping Flesh Wound’

He described loan cancellation as putting a band-aid on a giant, seeping flesh wound, when the genuine reform needed is a complete operation

personal loans 2021

In December, Biden said to the media that, though it is arguable that the president has the executive powers to cancel up to $50,000 in student debt per borrower, he is unlikely to go through with the executive action.

While blanket debt cancellation is desirable to some, others argue that universal forgiveness may actually exacerbate inequalities. Harvard Professor of Public Policy David J. Deming highlighted that individuals’ actual loan balances frequently do not reflect their economic conditions.

You probably don’t want to just do blanket loan forgiveness for everybody. Why? Because most of the people who have six-figure debt are actually better off than the people who have small numbers in terms of debt, he said. That might seem counterintuitive, but the reason is that most people who have six figures of debt, it’s for graduate school, particularly law school and medical school.

A policy needs to focus on helping people who don’t have the ability to repay the loan, not just on paying back the biggest balances, Deming added. Because there’s an awful lot of people out there with $80,000 loan balances, who are going to make incomes in the top 1 percent, or close to it.

One University, Two Worlds

Berry, a current senior at the College, said student loan debt at Harvard becomes a larger issue when factoring in graduate school. Roughly 83 percent of undergraduates at the College will return to pursue additional schooling in the form of graduate or professional degrees, according to a report published by the University’s Office of Career Services.

I think the conversation is different if we talk about the graduate schools. That’s a bigger issue, especially because grad school is really expensive – I think that’s where we could extend the conversation, he said.

Cynthia E. Ahmed, Vice Chair of Policy for the Harvard Graduate Council and a current student at the Law School, said there exists a division in the way student loan debt impacts graduate students across the University. Ahmed highlighted that, though loan debt can be extensive for certain individuals, it is not necessarily a universal issue.

There’s definitely a split – students with loans, students without loans – and the career trajectories, life trajectories, lifestyles, happiness to a certain extent, begin to reflect this split amongst students, Ahmed said. I think the split is a little less concerning at schools with lower tuition.

Victoria J. Vicki Dzindzichashvili, a Master of Public Policy candidate at the Kennedy School on leave during the Covid-19 pandemic, said she believes that, given the financial hardship of graduate school students, Biden’s current plan is not enough.

I feel disappointed, Dzindzichashvili said. I believe that public higher education, at the very least, should be completely free. So when I see the administration saying only $10,000, I unfortunately feel like they’re not being serious about helping working-class people.

Let’s say, the half of students at the Kennedy School who are facing six-figure debt loans – if that wasn’t the case, then you’d have a lot more students thinking seriously about how they can make the world better, and thinking about public service the way that the Kennedy School likes to talk about public service, she added.

Of the Kennedy School’s 569 Class of 2019 graduates, 4 percent went on to work in state government and 20 percent in the federal government, compared to 37 percent of graduates who worked in the private sector, according to an employment report published by the payday loan stores Mississippi Kennedy School in 2019.

The use of debt cancellation as a sweeping economic measure fails to account for the structural issues undergirding student loans, according to Berry.