Debt Relief Has Public Support

The political debate over whether President Biden should move to cancel some or all of the $1.7 trillion in student loan debt currently owed to the federal government is largely focused on perceptions of the role the government should take in making higher education affordable and accessible.

Although the debate is sharply divided among party lines in Congress, public perception has largely shifted in recent years. Currently, one in five voters is in support of broad-based cancellation. Younger voters, however, are an outlier. Existing in a world of skyrocketing tuition rates, record inflation, stagnant wages and increasing need for a college degree, 71 percent of voters under the age of 34 support some form of loan cancellation, including a majority—56 percent—of young Republican voters, according to a 2022 survey.

The heightened attention to the federal role in higher education is new, according to higher education experts, and follows a rapid shift in public opinion that the government should take a stronger role in helping students cover the costs of college. This shift, followed by presumed economic gains related to Biden’s impending decision on student debt, could serve as a catalyst for a stronger federal role in addressing the high costs of college.

“I think when we cancel debt … [it] is a way of the government saying we made a mistake as a government, we make a mistake with student loans, we are owning up to that mistake, we are canceling these debts. It is an acknowledgment that student loans are not a viable way to pay for higher education moving forward,” said Charlie Eaton, professor of sociology at the University of California, Merced.

How We Got Here

The shift in public opinion informing the debt relief debate is largely informed by a greater understanding of the impacts of debt, financial struggles in the face of the changing global economy and recent changes in the role the federal government has taken to address financial struggle, especially during the COVID-19 pandemic.

Since 2010, there has been a rapid shift in public opinion toward the government assuming greater responsibility to cover the costs of higher education, according to Who Should Pay by Brian Powell, a professor of sociology at Indiana University, and Natasha Quadlin, an assistant professor of sociology at the University of California, Los Angeles.

“There are very few cases in which public opinion has changed this quickly in such a short period of time,” said Powell.

The authors found that in 2010, an overwhelming majority of Americans—80 percent—believed it was primarily the responsibility of students and parents to bear the cost of college. On the other hand, 27 percent believed college cost should be a shared burden between individuals and the government. The authors found that this trend was consistent since the 1980s.

However, between 2010 and 2015, something changed: there was an 18 percent increase in public belief that the government should play a role in helping students pay for college.

Powell noted that although many still believed students and parents should have the main responsibility of paying for college, this shift demonstrated increasing public support for a stronger federal role in helping students pay for college.

“If any of these any of these questions related to debt relief were asked in 2010, public opinion would be absolutely opposed to it,” said Powell. “People increasingly moved to this idea that the government should be responsible or the government should be in partnership with parents and students. So what this means is the public right now is receptive to plans to make college affordable.”

The shift in public opinion, according to Powell, can be attributed to multiple factors, including new pressures in the economy and an increasing number of Americans who are realizing the value of a college degree, as well as rising costs of higher education.

Additionally, the public has a greater awareness of education debt and the normalization of taking out debt to be able to afford a college degree.

“Tuition skyrocketing over the last decade as well as wages being stagnant as well as a double effect of people having a hyper view of who holds debt, because there’s more people who have debt and have to take on debt,” Braxton Brewington, a spokesperson for the Debt Collective, said has all had a great effect on pushing higher education into the national agenda.

Between 1993 and 2012, both the number of students taking out loans to pay for college and the amount borrowed increased dramatically. A Pew Research Center study found that in 1993, 49 percent of students were taking out loans. By 2012 this figure had risen to around 69 percent of students taking on debt to pay for college.

According to federal data, one in five Americans has student loans, but most borrowers have relatively small amounts of debt, with 53 percent of borrowers holding less than $20,000 in federal student loans.

Younger Americans disproportionately hold student loan debt compared to older Americans. Considering individuals aged 18 to 34, 57 percent had student loans, compared to 16 percent of those above the age of 50. These younger Americans are also faced with a nearly 40 percent increase in tuition costs at public four-year universities in the last decade.

“The great publicity about student debt has made people much more aware. A large number of people are much more receptive to the idea that you cannot rely only on individuals themselves,” said Powell. “The issue about student debt is one of the very reasons people have become more receptive to the idea of government structuring.”

According to Brewington, increased public awareness of racial inequality in recent years has also played a role.

For Black borrowers, whose wealth accumulation disproportionately lags behind that of white borrowers, the impacts of student debt are more severe. A study conducted in 2019 by The Journal of Consumer Affairs found that student debt accounted for 3 to 7 percent of the racial wealth gap in 2016.

Recent actions by the federal government have also increased public awareness of the economic impacts of federal action to address economic hardship.

Experts noted that the expansion of the federal government’s role in health-care coverage after the passage of the Affordable Care Act in 2010 provided an example of how the federal government could address the costs Powell called “bread-and-butter” issues like health care and education.

Additionally, broad-based public support for the Trump and Biden administrations’ pause on student loan payments and universal distribution of stimulus checks to help alleviate some of the financial burdens caused by COVID-19 have also contributed, experts said. Biden’s recent actions on student debt—his administration has already canceled $18.5 billion owed to the federal government—are also significant. These include the changes to the Public Student Loan Forgiveness program and forgiveness for individuals with permanent disabilities.

“We’ve gotten a preview for what mass cancellation will look like from the expansion of the Public Service Loan Forgiveness program and the correction of some of the problems with it,” said Eaton.

The potential economic impacts of debt forgiveness have also entered the national debate. Treasury Secretary Janet Yellen said in May that student loan relief would yield benefits for the economy, especially for low-income individuals.

“Student debt is a substantial burden to many people, especially those who end up with low incomes,” said Yellen. “[Student loan relief] could be good for the economy.”

Although Biden’s final proposal is still unknown, debt relief of $10,000 per borrower, which was one of the president’s central campaign promises, could provide economic relief to more than 15 million people, according to 2021 data from the Education Department.

The Political Climate

Ideas about government responsibility inform the current debate in Congress on debt relief. However, it is also coupled with intense polarization over the idea of whether Biden can use executive authority to erase debts owed to the federal government.

Most Democrats have largely supported the idea that Biden has the authority to cancel student debt, however, Republicans have held that such executive authority does not exist.

Republicans, despite disagreeing with the concept of debt relief over all, believe that Biden should have to go through Congress to cancel debt. Both congressional staff and higher education experts are expecting pushback from Republicans when Biden announces his plan to address student debt. Already, a coalition of Republican Senators has introduced a bill that would prohibit Biden from canceling student debt. Experts say that these efforts will likely die due to the lack of a Republican majority in Congress.

In the eyes of the public, polarization and dysfunction in Congress could be informing a general consensus that Biden should be the one to take action.

“I also think that has something to do with a growing understanding of the dysfunctionality of Congress. So I do think that’s also tied to a demand or call for Biden to take action,” said Brewington.

Higher education experts believe the increased public consciousness on student debt relief could push other issues related to the affordability of higher education into the national agenda, acting as a political catalyst that could increase the federal government’s role in covering the costs of higher education. This includes changes to the student loan system itself, which many higher education leaders have long called for.

“The gains from across-the-board loan forgiveness will soon disappear, like water poured into sand, unless we ask and answer some basic questions about the design of federal student loans,” said Terry Hartle, senior vice president of government relations and public affairs at the American Council on Education.

Hartle said reauthorization of the Higher Education Act, which governs the federal student loan system at large and historically was regularly revised by Congress, has been thwarted by increased polarization in Congress, and as a result the legislation has not been updated since 2008.

“This is less of a policy debate than a political issue,” said Hartle. “As long as it remains a political food fight, it is going to be hard to have a discussion on good public policies that will help students and be fair to taxpayers.”