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The role of states in contributing to the student debt crisis


Let's look more closely now at President Biden's plan to forgive some student debt and the pushback against that plan. Student borrowers in the U.S. owe more than $1.5 trillion. Biden's plan would forgive 10- to 20,000 per person. Twenty-two Republican governors sent him a letter last week saying that'll leave the lowest-income Americans paying the debts of doctors, lawyers and professors. Here's how Florida Governor Ron DeSantis put it.


RON DESANTIS: It's very unfair, you know, to have a truck driver have to pay back a loan for somebody that got, like, a Ph.D. in gender studies.

SHAPIRO: Our next guest, Heather McGhee, takes a different view. She researches inequality in student debt and is author of "The Sum Of Us." Welcome.

HEATHER MCGHEE: I'm so glad to be with you.

SHAPIRO: How do you respond to the argument we just heard, that this plan effectively asks taxpayers who chose not to take on debt to subsidize the decisions of those who did?

MCHEE: This big new policy is in the larger economic interest of the nation. It is going to be great for our economy to help unshackle 20 million borrowers. And 90% of the money is going to people who earn less than $75,000 a year.

SHAPIRO: Let me ask you about another argument that the Republican governors make in their letter. They write that college may not be the right decision for every American, but for the students who took out the loans, it was their decision - able adults and willing borrowers who knowingly agreed to the terms of the loan and consented to taking on debt in exchange for taking classes. What do you say to that?

MCHEE: Well, first of all, it was the decision of politicians to create a debt-for-diploma system, where, because of cutbacks at the state level of public colleges and the shift at the federal level from grants to loans, we pushed the cost of college out of reach for working-class families at the exact same time that politicians decided to make a college degree the ticket to the middle class.

SHAPIRO: Explain why that shift in state funding for education is so essential to understanding this debate.

MCHEE: You know, college used to be virtually free at the public level, not because it didn't cost anything, but because the government picked up the tab with state funding that was generous. And whatever was left over would be made up often by a grant, not a loan. And so it was a political decision to cut state funding for public colleges. So young people have been paying for that political decision, and now they get to benefit from a smarter political decision by the Biden-Harris administration.

SHAPIRO: OK. So there's this pincer, where on the one hand, you can't get a good job without a college education, and on the other hand, a college education is more expensive than ever. There's a third element here, which is race. And you've written that it's difficult to understand this without understanding the racial component. Explain how that factors in here.

MCHEE: Race plays a role in the student debt crisis in two ways. One, politically, there was more widespread bipartisan support for generous grants and funding for college back when 90-plus percent of the college-going population was white. The second way is that there's no way to understand the significant racial gap in who has to borrow and at what amounts without understanding why it is that there is a massive racial wealth divide in this country. If you're a family that benefited from multiple generations of federal subsidies for homeownership and wealth building, you can draw on intergenerational savings and wealth. If you are a family, a Black family, that was redlined and deliberately excluded out of that wealth building subsidy, then you have to go into debt. That's why today, Black borrowers are more likely to borrow. And even upon graduation, a Black college graduate has less average household wealth than a white high school dropout.

SHAPIRO: Heather McGhee is author of the book, and now the new podcast, "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." Thanks a lot.

MCHEE: Thank you. Transcript provided by NPR, Copyright NPR.

Ari Shapiro has been one of the hosts of All Things Considered, NPR's award-winning afternoon newsmagazine, since 2015. During his first two years on the program, listenership to All Things Considered grew at an unprecedented rate, with more people tuning in during a typical quarter-hour than any other program on the radio.
Michael Levitt
Michael Levitt is a news assistant for All Things Considered who is based in Atlanta, Georgia. He graduated from UCLA with a B.A. in Political Science. Before coming to NPR, Levitt worked in the solar energy industry and for the National Endowment for Democracy in Washington, D.C. He has also travelled extensively in the Middle East and speaks Arabic.
Justine Kenin
Justine Kenin is an editor on All Things Considered. She joined NPR in 1999 as an intern. Nothing makes her happier than getting a book in the right reader's hands – most especially her own.