A recent brief by the Roosevelt Institute analyzed how $50,000 of student debt forgiveness would impact household wealth and argues that wealth paints a more complete picture of borrowers' financial status and more accurately accounts for racial disparities.
"We were getting really frustrated with seeing data manipulated in a way that provided an incorrect picture, which was then being used as media fodder to feed the notion that this was regressive,' says Laura Hamilton, professor of sociology at University of California, Merced and one of the authors of the report. 'The Warren-Schumer proposal is just not regressive policy."
"To address some of quantitative concerns, Hamilton and her fellow authors intentionally did not consider private student loans in their calculations (because there is no policy that is proposing cancelling private loans) and considered household wealth instead of income (because debt cancellation is ultimately a wealth transfer). Instead, Hamilton discusses how Black families have historically been denied the ability to build wealth, and how this has led many Black students to use education for mobility and a move into the professional class, while still carrying substantial debt that their white peers do not have at the same income. 'So when you disaggregate by race, you can really see that this would play a pretty central role in building the middle class...And it adds to previous research that suggests student debt cancellations is really important for closing the racial wealth gap in the United States,' says Hamilton."
Read more on how these differences in wealth mean that many Black borrowers would benefit significantly from student debt forgiveness in the CNBC article here.
