There is an important debate among Democrats on whether canceling all student debt would advantage too many affluent degree holders, at the expense of needier people. The sweet spot seems to be $50,000 of debt cancellation, as proposed by Elizabeth Warren and Chuck Schumer. At that level, nearly all debt of moderate-income debtors would be forgiven. Some 78 percent of borrower households in the bottom 60 percent of the income distribution (under $74,000) would receive full debt cancellation. Even so, the optics of student debt relief raise issues of social class. Almost by definition, people who attend four-year colleges are better off than those who don’t. And the Democrats have a political problem with the non-college-educated, who voted
disproportionately for Donald Trump. College student debt relief at government expense is not exactly popular with those who never got to attend college. For working-class kids, the most plausible ladder within near reach is community college. But even community college costs several thousand dollars a year, plus lost income if you attend full-time. So how about balancing the perceived class favoritism of student debt relief with a big aid package for community college? It could include having the federal government cover all tuition costs, plus a stipend, as the original GI Bill did. The total cost of all public community colleges in the U.S. is about $52 billion—pretty modest compared to the immense benefits. Of that, $12 billion is tuition and fees. The biggest obstacle to success at community colleges is not motivation. It’s that most community college
students also have jobs and many have families. The median completion rate for a two-year associate’s degree is over seven years. Canceling student debt would cost hundreds of billions of dollars, depending on income cutoffs. How about if we balance that with $20 billion for free tuition plus stipends for public community college students? What did Donald Trump ever do for them?
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