Don’t just cancel student debt: The cycle only ends with free college

Lost in the debate regarding President Biden’s anticipated announcement that he plans to cancel student debt is a more complicated, and arguably more important, reality: Democrats have abandoned all efforts to make college tuition free at the federal level.

This means that even if Biden cancels all outstanding student debt, the federal government has not enacted plans to prevent students from accumulating new debt moving forward. While borrowers may momentarily rejoice at debt forgiveness, by tabling plans to make college tuition free, Democrats threaten to undercut their own attempts to expand college access and affordability. Debt cancellation — while potentially meaningful to millions of Americans — will not make higher education affordable without further action. The Biden administration, congressional Democrats, and yes, also Republicans, should do more to make college affordable so that millions of Americans can access the life-enhancing benefits of a college education.

Despite widely varying opinions regarding the appropriate role of higher education in American life, an indisputable fact remains: College degrees pay off. Recent research suggests the economic returns to college degrees are at an all-time high. On average, recent college graduates earn $52,000 per year, while young workers with high school diplomas but no higher education credentials earn only $30,000 per year. This difference, known as the college wage premium, has increased since the start of the COVID-19 pandemic. College completion is also associated with lower unemployment rates. So, when talking about a worthwhile investment for an individual and a society, college proves its value as an effective path to higher-paying jobs and economic wellbeing.

But higher education plays a larger role than just increasing the economic security of individual students. The American economy — for better or for worse — requires increasing the number of people with postsecondary education credentials. Nearly two-thirds of all jobs require some form of college education, yet only 48 percent of Americans over the age of 25 have a college degree. And rates of college completion vary dramatically by race, gender and income: Black Americans, Native Americans and Latino Americans are significantly less likely than white Americans to have a college degree. College graduation rates are lowest for Black men and Native American men. Students from low-income families are significantly less likely than wealthy students to earn a bachelor’s degree. These inequities, coupled with the concerning reality that more than 1 million students have dropped out of college since the onset of the COVID-19 pandemic, make our long-term economic outlook even bleaker.

Despite its proven importance to students and the broader American economy, college is prohibitively expensive for millions of people. And tuition is only a part of the problem. While tuition has significantly increased over the past 10 years, the vast majority of the full cost of college is made up of student living costs such as housing, food, transportation and childcare. In fact, these costs beyond tuition — which include students’ basic needs — amount to more than $30,000 per year, which is more than three times the average cost of in-state tuition at a public university. Given that the average in-state tuition at a public four-year university is $9,400, and average tuition at a public two-year college $3,900, tuition is only a small piece of what makes college unaffordable for so many people across the country.

To make college affordable for all Americans, federal policymakers must lower the entire cost of college. This should include making public colleges and universities tuition free. Doing so will help students afford the entire cost of college, and it will allow students to use other sources of financial aid to help address their living costs. But even making college tuition free will not prevent students from accumulating debt moving forward. To prevent future student debt burdens, the Biden administration and Congress must craft federal policy that will reduce the living expenses students most struggle to afford: housing, food, transportation and childcare. To do this effectively, federal policymakers should:

1. Increase financial aid to ensure all students can afford their living expenses
2. Provide housing vouchers to students with low incomes, particularly those at community colleges
3. Expand public benefit programs — like SNAP — to better include, and suit the needs of college students
4. Invest in public transportation to ensure students have accessible transit options
5. Invest in childcare centers on or near college campuses and create subsidies to make it affordable for students to access those centers

Democrats have a rare opportunity to introduce legislation that would actually prevent students from accumulating debt moving forward. If they do so, they will be able to meaningfully advance educational and economic equity. If they don’t, Americans can expect the cycle of severe financial burdens to only continue to devastate students indefinitely, even well after a one-off student debt cancellation is done.

Chris Geary is a senior policy analyst at New America’s Center on Education and Labor where he focuses on the intersection of higher education and labor policy and seeks to advance educational and economic equity. Previously, Chris was a policy analyst at the Georgetown Center on Poverty and Inequality, a policy fellow in the mayor’s office in New Orleans and a public school teacher. Follow him on Twitter: @chrisggeary