A really small fraction of scholar mortgage debtors attended elite schools

United States President Joe Biden attends a CNN City Hall at the Pabst Theater in Milwaukee, Wisconsin on February 16, 2021.

SAUL LOEB | AFP | Getty Images

“We need student loan forgiveness in excess of the $ 10,000 proposed by your administration,” Jocelyn Fish, director of marketing for a community theater, told President Joe Biden at CNN’s Presidential City Hall on Tuesday night. “We need at least $ 50,000. What are you going to do to make this happen?”

“I won’t be able to do it,” replied the President.

Biden went on to say that there was no point in using money to cancel student debts “for people who went to Harvard, Yale and Penn.”

The exchange quickly rocked progressives, student loan advocates, and borrowers, who have urged Biden to increase debt relief he sponsored from $ 10,000 to $ 50,000 and through executive action to cancel the loans.

Proponents also point out that it is largely a myth that people in student debt – especially those struggling with it – have the benefit of a reputable education behind them.

“The vast majority of students attending the elite schools the president mentioned at CNN City Hall have no student loan debt,” said Eileen Connor, litigation director for Harvard Law School’s student predatory loan project.

In fact, only 0.3% of federal student borrowers valued Ivy League colleges, college expert Mark Kantrowitz estimates told CNBC.

More from Personal Finance:
What Different Amounts of Student Loan Forgiveness Might Mean
Student borrowers on private loans get little relief in the Covid era
The plan to cancel $ 50,000 in student debt would help $ 36 million

“The Ivy League colleges are only eight of more than 6,000 colleges,” said Kantrowitz. “Ivy League colleges also have loan-no-loan guidelines that greatly reduce the percentage of students who take out loans.”

The President’s testimony indicated that he has still not come up with a broader student loan scheme such as that advocated by his progressive rivals in the Democratic primary. (Biden has said he prefers $ 10,000 for forgiveness and up for those who have attended public colleges and historically black colleges and universities.)

His comments also echoed the arguments put forward by Republicans and some moderate Democrats that student debt relief is a help for Americans with failed college degrees.

“If you raised $ 100,000 to study poetry at Bowdoin and then started selling coffee at Starbucks, you may regret some of your choices and I sympathize with you, but I’m not sure why you got $ 50,000 earn check from taxpayers, “said Rick Hess, director of educational studies at the American Enterprise Institute.

However, Kantrowitz found that only 12% of borrowers attended very selective colleges and universities. Around a quarter of the borrowers come from private, non-profit universities.

By far the largest proportion of borrowers – 49% – came from public universities.

“Public colleges aren’t cheap,” Kantrowitz said, adding that college attendance still costs more than $ 22,000 a year, including tuition, room, board and fees.

Meanwhile, an additional quarter of borrowers attended nonprofit schools, which have come under fire for misleading students about programs and career results, and hunted down veterans and blacks. Almost half of those who take out student loans at these schools default on payments.

“Wealthy students who attend ‘elite’ schools usually have no problems,” said Ashley Harrington, federal prosecutor at the Center for Responsible Lending.

“We have to look at what is really going on with this crisis and who is actually being affected,” said Harrington. “Student loan debt disproportionately affects people with low incomes and low wealth [and] Black and brown people fight the most. “

Comments are closed.