There is a crucial scene in the award-winning 2018 debut novel Asymmetrical by Lisa Halliday, a roman a clef about a young graduate who has a relationship with an elderly American novelist. One day the protagonist, burdened by student debt and trying to live on the cheap, finds out that the novelist – a thinly disguised Philip Roth – has quietly contacted the Harvard Student Affairs office and without telling her, has paid off her student loan in full.
This scene would have resonated with every debt-burdened student as a kind of fairy tale come true. For the many students who go to university in America today, and do not have wealthy parents or benefactors, the reality of student debt is ugly and crippling. Those who continue on to graduate school, medical school or law school can come out with debt close to half a million dollars or more.
According to the Urban Institute, a Washington-based think tank, each year, 30 to 40 per cent of all undergraduate students take federal student loans, and roughly 70 per cent of students who receive a bachelor’s degree have an education debt by the time they graduate.
When I left graduate school in the 1990s – putting off the real world for as long as possible by accruing degrees in fields that would certainly never earn me a return on investment – I was in so much debt, I could have used it as a down payment on a home. I shuddered every time I opened the dreaded envelope from Sallie Mae, a private student-lending corporation set up in the 1970s.
Colleges are more rarefied than when I went to school. The cost of American universities has shot up to unimaginable levels. An Ivy League education costs $83,000 a year without health care (another consideration in America, where you can go into debt for life if you get hit by a car or break a leg without health insurance).
Public universities with in-state fees can cost a student around $21,370 (room and board plus tuition) each year for four years. Two-year colleges cost around $12,000 a year. This makes higher education inaccessible to an entire portion of society. The minimum wage in some states is around $7.25 per hour. In some states, like California, Washington, New York and Massachusetts it is around $15 an hour. That is still not enough to pay for college.
Student debt totalled more than $1.76 trillion last year – two or three times more than what it was 10 years ago. Which is why US President Joe Biden’s $400 billion student loan forgiveness plan might be his greatest legacy – a legacy not unlike former US President Lyndon B Johnson’s Civil Rights Act that advanced equality throughout the nation.
The loan forgiveness plan could affect millions of Americans, cancelling debt of approximately $430bn for nearly 40m borrowers. But first, Mr Biden has to get it through the Supreme Court and the Conservative justices.
Last week, Solicitor General Elizabeth Barchas Prelogar, who represents Mr Biden’s administration, gave an incredible oral argument before nine justices describing how the plan would relieve students of debt, and arguing the Biden case.
Ms Prelogar is from Idaho and she went to public schools before university at Emory in Georgia, St Andrews in Scotland and finally Harvard Law. Presumably, she understands how painful student loans can be.
Ms Prelogar’s job in court was not easy: conservative justices are sceptical of the plan. Mr Biden rolled out the loan forgiveness plan by using a post-9/11 statute, The Heroes Act of 2003, as a justification.
The Heroes Act allows the US Secretary of Education to “waive or modify” student loan programmes to ensure borrowers are not left worse off because of a national emergency. At that time, it was the 9/11 terrorist attacks. In this case, it was the Covid-19 pandemic. But opponents say Mr Biden’s plan goes beyond the Heroes Act, and that he has overreached.
The nine justices considered legal challenges to Mr Biden’s plan to cancel up to $20,000 in student debt for borrowers with limited earnings. But six Republican led states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina, as well as a conservative advocacy organisation – brought lawsuits against it. Ms Prelogar’s job was to convince them.
According to several legal experts observing the arguments, she may have influenced or even changed the thinking of two justices, perhaps more. She argued that Mr Biden was acting within the law to relieve distress during “national emergencies”.
At the heart of this is inequality, and the Act is a chance to rectify it.
I have taught at three universities over the past decade, and I work with many young graduates. I don’t think I have come across one student who did not feel deep anxiety about finding a job and paying off their loans.
Covid-19 forced many students to abandon their studies (“Why pay for a year and go into debt when I have to study remotely?”) and many more to move back in with their parents because they could not afford rising rent. This generation has it much tougher than when I first set out looking for a job.
Mr Biden’s foresight could make all the difference to a new generation entering the workforce unencumbered and able to focus on building their careers. During his campaign, Mr Biden promised to provide relief to students and to give potential students who did not want to go into debt a path to receiving an education.
Whatever is decided – the decision is expected in June – it will have repercussions for generations. The Republicans call the bail out unfair for those students who paid off their loans and they say it is expensive for tax payers.
But if you ask burdened students, they will say that taxes are for the greater good. Mr Biden will say this is a “game changer”. As a tax payer, and someone who did pay off my loans, I agree. For too many people in America education is inaccessible. There are those unfortunately who do not go to college because crippling loans are a barrier that frightens them.
Mr Biden’s act could level the playing field. It could give a chance to many to enter the middle class. If education is the greatest tool we have against poverty, extremism, violence, then this is a very small price for the rest of us to pay.
