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**FEBRUARY 3, 2021**

Kuttner on TAP

Student Debt Cancellation and the Working Class

****

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?

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

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