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Biden’s student loan proposal is flawed.  Revenue caps will be a nightmare.

This weekend, more than 460 women will receive unusual letters in the mail: “We are writing to you with good news: Bennett College, in conjunction with the Rolling Jubilee Fund, has canceled the outstanding balance you previously owed directly to the college .

Bennett College is a small liberal arts college in Greensboro, North Carolina, and one of two historically black colleges and universities in the country for women. In total, more than $1.7 million in tuition-related debt was erased for former students, some of whom had balances over $20,000. Now every account the school had in the collections has been erased as an unconditional gift.

The resource tests and associated restrictions seem fair in theory. In practice, the results are like taxes, where the privileged are better able to hire accountants, navigate complexity, and reap the associated benefits.

Why did the Rolling Jubilee Fund do this? The Rolling Jubilee is an initiative of the Debt Collective, the country’s first debtors’ union, which I helped found. For nearly 10 years, we have led the movement to push the government to cancel all student debt. We decided to partner with Bennett College to bring attention to the disproportionate impact the student debt crisis is having on black women and to push President Joe Biden to keep his campaign promise to end poverty. student debt for the country’s 45 million borrowers.

But student loan holders are still waiting for relief. Biden is expected to eliminate federal student loans through an executive order. He could send letters like the one we just sent to former Bennett students, just to every borrower in the country, lifting a crushing weight off their shoulders.

Most people seem to have forgotten that the president pledged as a candidate to eliminate a “minimum” of $10,000 for each borrower, in addition to pledging to cancel everything federal undergraduate loans for people who have attended public colleges and universities as well as private HBCUs and minority-serving institutions for people who earn less than $125,000 a year.

Unfortunately, the White House seems determined to move the goal posts. This month, speaking of loan forgiveness, Biden said perhaps $10,000 tied to an individual’s income would be forgiven for those earning less than $125,000. Debt cancellation is the right thing to do. But $10,000 is nowhere near enough, and it shouldn’t be means-tested in any way. In fact, these provisions are recipes for disaster.

There is simply no compelling reason to limit relief to $10,000 or to exclude borrowers above an arbitrary income threshold. Research shows that the maximum economic and social benefits come from canceling all student debt and making it more widespread: the boost to the economy will be greater, the racial wealth gap will shrink accordingly and more lives will be dramatically improved.

For millions of borrowers, $10,000 won’t make a dent in the huge interest that has accumulated on their balances. A recent analysis by Forbes showed that the amount could have “little or no benefit” for many of the 9 million borrowers currently on income-based repayment plans, which are designed to help people in difficulty. reducing monthly payments and extending their loans longer. Yet they are some of the most needy borrowers in the country.

Targeting student debt forgiveness by implementing an income cap will only hurt the most vulnerable debtors — the vast majority of low-income people, women, and people of color — as borrowers will have to apply and prove they are eligible rather than cancellation happening automatically. As a result, millions of people are unlikely to know they are entitled to help or how to get it.

Ministry of Education officials have themselves warned that means-tested cancellation (tying cancellation to income) is much easier said than done. For example, the Department of Education does not have access to IRS data and many poor people are non-filers, which means they may find it difficult to verify their income as part of any tax filing process. request.

Department of Education fiascos are all too common. Just last month, a damning report from the Government Accountability Office detailed the failures of income-driven reimbursement schemes: Despite millions of people being enrolled over nearly three decades, only 157 lucky people were approved for forgiveness. The report found that thousands of people have been arbitrarily denied relief, and many more are doomed by a confusing and onerous system.

That’s the reality the Biden administration has to deal with: Means tests and associated restrictions seem right in theory. In practice, the results are like taxes, where the privileged are better able to hire accountants, navigate complexity, and reap the associated benefits.

The restrictions on loan forgiveness are doubly absurd given that almost everyone would be selected under the income cap envisioned. Only 5% of student debtors are calculated to earn more than $125,000, and many of these high-income borrowers still have low or negative net worth.

That means the Biden administration doesn’t need to create elaborate systems to exclude wealthy people from cancellation. Really rich people don’t have student loans because they (or, more likely, their parents) can afford tuition without borrowing money. In other words, cancellation is already means-tested: if you have debt, that means you need relief.

Why is the president so resistant to this fact? The answer seems to lie in his stubborn and mistaken belief that a significant number of borrowers are elite white graduates of Ivy League institutions. But Ivy Leaguers make up less than half of 1% of all student debtors and tend to graduate debt-free thanks to a combination of relatively affluent education and generous college endowments. Debtor students are much more likely to attend for-profit schools or HBCUs.

Instead of lending credence to conservative talking points, Biden should be unabashedly advocating for cancellation. Republicans and right-wing pundits are spreading the lie that student debt forgiveness is “regressive” — that it helps the wealthy. The president should call their bluff. If canceling student debt had really helped the wealthy, Republicans would have done it already.

The Biden administration cannot afford to squander a historic opportunity by turning a winning policy into a political and bureaucratic fiasco – a 2.0. Only this time it won’t be reports of a downed website. It will be a self-imposed and preventable bureaucratic, ethical and political disaster that will further exclude and disappoint the very people Biden claims to care about and to whom he owes his 2020 victory.

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