The Argument: Should We Cancel Student Loan Debt?

This week, while I'm on vacation, we'll be sharing work from two other New York Times Opinion podcasts. First up, an episode from our friends at The Argument about how to cancel student-loan debt. Host Jane Coaston is joined by activist Astra Taylor and economist Sandy Baum, who agree that addressing the crisis requires dramatic measures but disagree on how to get there. Thoughts? Guest suggestions? Email us at [email protected]. The Ezra Klein Show is produced by Annie Galvin, Jeff Geld and Rogé Karma; fact-checking by Michelle Harris; original music by Isaac Jones; mixing by Jeff Geld. Special thanks to Shannon Busta and Kristin Lin.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:17Ezra Klein?

  Hello, welcome to the Ezra Klein Show, which is going to be less Ezra Klein-y than normal today. I'm on vacation, but we've got something great for you, an episode of our sister podcast, The Argument, which is also part of Opinion Audio, hosted by my good friend Jane Coaston. And this is a debate about something that we've talked about a bunch on the show, which is whether we should cancel student debt. You can follow The Argument wherever you get your podcasts, but for now, please enjoy.

• 0:51Speaker 01

  Today on The Argument, imagine if we wiped away every American's student loan debt. Should we?

• 1:02Speaker 01

  The cost of higher education in America has skyrocketed in recent decades, and so have the student loans to pay for it. Americans are carrying more than $1.7 trillion in college debt. That's more than we owe credit card companies or auto lenders. Nearly 43 million of us are still paying off our college tuition. It's a crisis with massive consequences for our economy and for millions of Americans who made, quote, "the right decision to get an education." President Biden campaigned on forgiving $10,000 of debt for everyone. Democrats have been pushing for more. Clearly, some relief is on the table, but what's the most fair way to do it?

• 1:42Speaker 01

  I'm Jane Coaston, and this is one of those debates I have to be skeptical of my own opinion on. As someone with sizable student loan debt that I have no idea when I'll finish paying off, my first reaction is, yes, please, cancel my debt. I will happily invest that money elsewhere in our economy. But especially when a position benefits me, I know to be extra critical. So I brought together two people who feel very strongly that the crisis is real and needs fixing, but that's about where their agreement stops.

• 2:16Speaker 01

  Astra Taylor cofounded an organization called The Debt Collective, which pushes for total cancellation of debts for all. Sandy Baum is a non-resident senior fellow for the Center on Education, Data, and Policy at the Urban Institute. She thinks universal debt cancellation isn't progressive at all. In fact, it's regressive. Needless to say, they deliver on our show's title. I'm still sweating.

• 2:45Speaker 01

  Let's start with a personal question. Do either of you have student loans or student loan debt? Sandy, you first.

• 2:51Speaker 02

  I went to college many, many years ago. My kids had some student loan debt. They have paid it off, so no.

• 2:58Speaker 01

  And Astra?

• 2:59Speaker 03

  I actually don't have any student loan debt, but about 10 years ago I did. So, right after the Great Recession, I owed 42,000 and I defaulted.

• 3:08Speaker 01

  Ah.

• 3:09Speaker 03

  So, I experienced that punitive measure because overnight, my balance went up 19% and my credit was even worse. And then I had a change of fortune. Turned out, my partner is a popular musician. He went back on the road and he paid off my student debt. So, I've experienced both the trauma of default and the benefit of suddenly having that debt disappear.

• 3:33Speaker 01

  That is the most romantic thing I have ever heard.

• 3:37Speaker 03

  It was pretty sweet, right?

• 3:38Speaker 01

  That's beautiful. So, as Senator Elizabeth Warren and other people have made clear, this was not always the norm. How did we get here?

• 3:48Speaker 02

  Well, the first thing is that when you're trying to judge the magnitude of student debt and where there are problems, it's really more helpful to look at the amount that individual students owe than it is to look at the aggregate amount of debt. Obviously, college used to be much cheaper. The tuition prices have gone up very rapidly, and that's part of the story. And we can talk about why that has happened. Another big part of the story is many more people go to college now. When I went to college, it was very rare that people whose parents couldn't pay went to college. You didn't have older adults going back to college so much. And if you couldn't afford it, you just didn't go.

• 4:24Speaker 01

  Right.

• 4:24Speaker 02

  But now, we have a situation where we implemented lots of financial aid programs because we think that you should be able to go to college even if you can't afford it. You know, you should get grant aid, but... Borrowing to pay for college is reasonable in the sense that it's an investment and you can pay out of the return to your investment and for most students that works, but it doesn't work for everybody because for some people it just doesn't pay off. It may be that they don't finish a degree. It may be that they went to a school that cheated them. It may be that they graduated in a really bad time. There are lots of reasons why it doesn't pay off for everyone and we need to protect those people. But one reason that we have much more student debt is because many of the people going to college now wouldn't have

• 5:08Speaker 02

  the money to pay, even if it were free tuition, they wouldn't have the money to live while they're in college. So it's a combination of it getting more expensive and partly because states and localities are not paying as much of their share as they used to. And part of it is who's going to college now.

• 5:24Speaker 03

  So I would tell the story slightly differently. There is a long tradition of education as a publicly funded good in the society. It goes right back to the foundation of our land-grant colleges and universities with the Morrill Act. I mean, look at something like the GI Bill that sent a lot of veterans to college for free. Look at the famous California Master Plan, which created a beautiful three-tiered system of education for the people of California. So actually, what's happened is we just took a wrong turn by using loans to finance education. There has been, as Sandy just said, a divestment. State investment in education and higher

• 6:08Speaker 03

  education has diminished and tuition has filled that gap. And what we've done is we've created this very complicated and I think very destructive system of lending to fill that gap.

• 6:21Speaker 01

  I went to the University of Michigan, which in some ways viewed itself as being recession-proof. And you hear this in a lot of college towns, that because the university operates as this giant employment center, that is very much encouraged by the government and elsewhere. But you saw that while the state could not afford to fund University of Michigan, Michigan State University, Eastern Michigan, Western Michigan, Northern Michigan, there are many directional universities in Michigan. That tuition and even more so, the fact that tuition is in some ways backed up by federal loans, the University of Michigan is able to keep on ticking, so to speak.

• 6:59Speaker 03

  But this was a political choice. If you look at California, and I think it's important to begin there, you have then-Governor of California Ronald Reagan, as a political project, wanting to impose tuition. He was raising the fees of this state university precisely because there's something deeper going on, which is an attack on the idea that people are entitled to an education and an imposition of debt as part of a right-wing economic project. And that is now the mainstream. Now we say, okay, this is just how you do things. Student loans have to exist, instead of contextualizing it. So I think, in some ways, we can say, oh, wow, the idea of canceling student debt is this radical demand. We can

• 7:41Speaker 03

  also say, no, it's a return to this egalitarian tradition of providing education for everyone on equitable terms because it's good for society as a whole. So there's a way in which what we're saying that sounds so out of the box now is a restoration of these foundational principles.

• 7:58Speaker 02

  So I would argue that we never had an equitable system, as you described. I mean, California, there were studies that California was the poster child for a regressive financing system. It wasn't that everybody went to college, and it wasn't that everybody went to the same college. I mean, the demographics of who goes to the University of California versus who goes to the California Community College system are very different. So the state, even though tuition has gone way up, the state spends much more per student on those who go to the University of California. If you can get into Berkeley and you're going to stay there for four or five years, you're getting a huge subsidy. Do you end up at the community college? You're getting a small subsidy. And who ends up at the community college? Those people from less affluent households. So really, one of the things

• 8:42Speaker 02

  that makes people think that it's equitable for people to pay some tuition is the distribution of those benefits, that we don't think that all these people from rich backgrounds who are going to end up being the rich people in the end deserve to have huge subsidies when we really need to help people. You know, in early childhood education, we need to fund community colleges better, but we need to fund their K-12 environments in their neighborhoods and their healthcare, so they'll have a better opportunity to go to Berkeley themselves.

• 9:08Speaker 03

  Right, but the spread between Berkeley then and a junior college, a merit college or whatever it was then, is less probably than the spread between Harvard or Yale and for-profit colleges, which is what we have at a national level, right? Which is the system that's evolved. So I totally agree, the University of California's system in the 60s and 70s wasn't sort of the ideal we should reach towards, but I think we should build on that model and that principle of public education for everyone and perfect that, instead of going further down the track we're currently on.

• 9:37Speaker 01

  Astra, a lot of your activism around this subject was sparked by the 2011 Occupy Wall Street demonstrations. Can you tell me a little bit about the history of the activism centered around student loan debt? And why do you think this has been such a focal point? What are the things we aren't doing because we are thinking about our student loans?

• 9:58Speaker 03

  Yes, it's 2021. Occupy Wall Street was 2011, so 10 years I've been in this movement. And what drew me to it was a kind of insight that something in our economy has changed. We are increasingly indebted, and people are indebted for the necessities of life. So we have to debt finance our education, we have to put our medical bills on our credit cards because we don't have universal healthcare, and the problem is wages have stagnated, right? That's actually the bigger context for this conversation about student debt. So wages have stagnated, people are borrowing, and there's kind of an illusion of broadly shared prosperity, but in reality, households are deeply indebted. Part of what debt does is it individualizes, right? It's your student loans for your education, it's your bill at the end of the month to

• 10:43Speaker 03

  the credit card company. But this isn't tens of millions of people making bad personal choices. This is a structural issue. This is about the way our economy is organized. And so we came together at Occupy Wall Street and we said, well, hold on. What if debtors actually, instead of being isolated, instead of defaulting a loan like I did, what if we came together and made demands for a different system? A system that actually worked better for everyone? And so part of that is actually just, first, about getting over the stigma. People have so much shame and stress about their debt. And I see that in the debt collective. I mean, we have people reaching out in absolutely desperate situations economically, but also psychologically. We have people saying that they think about killing themselves because they are so indebted and they can't get by.

• 11:28Speaker 03

  It also, in a kind of less dramatic way than that, does influence people's life choices. We see that people make career decisions based on their debt. There's data showing that people graduating from law school, for example, want to go into public interest careers. But then they realize, hold on, I can't pay off my $200,000 in debt working for $50,000 or $60,000 a year at some nonprofit. So I'm going to pursue corporate law. We know from professional associations that there's a crisis where there aren't enough dentists or doctors in rural areas because they have to go and pursue careers in places that are more populated and go into specialties where they can actually pay their massive student debt. It has a perverse impact on people's life choices.

• 12:13Speaker 01

  And Sandy, doesn't that have repercussions for the economy? If people aren't buying houses because they can't pay both a mortgage and their student loans, isn't that much debt bad for the economy? And hypothetically, a student loan-free me would be more likely to be interested in making those major purchases that are the main drivers of our economy.

• 12:39Speaker 02

  You really have to differentiate different kinds of debt. I mean, to me, the fact that people have medical debt, that we don't have a healthcare system that supplies healthcare to everyone instead of asking them to pay for it out of nothing, that is unconscionable. We shouldn't have that. If the movement were to forgive medical debt, I'd be like, yeah, we should never have medical debt. We should make sure in the future that no one ever has to borrow for that. The income distribution of people with medical debt is really different from the income distribution of people with college debt. If you're asking about the impact, first of all, many of the studies about the impact of student debt are significantly flawed. And one problem, I think, when you ask this question is, what's the counterfactual? So if you want to say, look, people who went to college have higher homeownership rates

• 13:22Speaker 02

  than people who didn't because they have higher incomes and higher wealth than people who didn't. In your situation personally, if someone had paid for you to go to college and you didn't have to borrow and you have the education you have and the job you have, you would be much better off. Of course.

• 13:39Speaker 03

  I would be so happy.

• 13:40Speaker 02

  Yeah, there are things you're not doing because you have to make loan payments. That's true. I mean, everyone knows that. Look, so, so that's clear. And if you compare the financial situation of people whose parents paid to people whose parents didn't, it's not just that they don't have college loans. Their parents are also giving them a down payment for a house. They're doing all kinds of things for them that other parents don't. And that's not fair. And that's our society at large. That's not about college. So the choice that people have to make is frequently, should I borrow money and go to college and get an education and have better opportunities? Or should I say, you know what? I'm not going to take out loans. I'm not going to college. People are much better off borrowing money, going to college, getting the benefit of a college education,

• 14:24Speaker 02

  even if they have to pay back their student loans. So it would be terrible for the economy if people stopped going to college. And I just want to point out that we have income-based repayment systems. They're not perfect by any means. They need to be strengthened and improved and all of that. But what we need to do is make sure that if you can't afford your payments, you don't have to make them. We have a system that will forgive the debt of people who can't afford it. It really needs to be strengthened. But to suggest that nobody should be able to borrow money? I mean, who would have a house if you couldn't borrow money for a mortgage?

• 14:57Speaker 03

  It would be that you would not need to borrow money to go to college.

• 15:00Speaker 02

  Tuition should be cheaper, absolutely. But even if there were no tuition, who's going to pay for you to live while you're in college if your parents can't afford it? And again, the people who go to college for a long time, to expensive colleges, are people who are relatively affluent. About half of the student debt that people are taking out is for graduate school. Is graduate school going to be free? Is Harvard going to be free? I mean, really? I mean, people are going to still borrow money for college because it's a good investment.

• 15:29Speaker 03

  So there's so much here to unpack. We have a society where You have to get credentialed to get a job. You have to get a bachelor's degree to get the job you used to be able to get with a high school degree. If you are black, you have to get a bachelor's degree to compete with a white candidate who lacks the same degree. So we have a system that's driving people to credentialize. Part of that, to me, is that, you know, education has been twisted into primarily job training, right? We think of it as, you know, you take out your loans to invest in yourself so you can get a job, so you can pay back those loans. I want to just break that paradigm and say, no, education is actually about education. This is why it should be free. Career training is part of that, right? And cultivating this kind of expertise is part of that, but there's actually something bigger.

• 16:12Speaker 03

  And we need to go back to this idea of funding education as something that is good for a democratic society. Sandy, I think, would say that canceling student debt is regressive because some high earners would get their debts canceled. I want to dispute that and say student debt itself is regressive. People whose parents are millionaires and billionaires do not have to take out student loans to go to college. They pay the tuition. So they end up paying less for the same degree than people who have to borrow, who have to take out student loans, because those borrowers pay over time, they pay over years and decades, and they are charged interest. So they often pay many times more over the course of the life of their loan.

• 16:55Speaker 03

  So student debt itself is regressive, which is why canceling it is a progressive policy. And we do have these systems. We have systems like IDR, which is income-driven repayment. We have a public service loan forgiveness. To say that they kind of need to be fixed is an understatement. These programs are completely broken. I work with debtors every day who are tortured by these programs. People have planned their entire adult lives, planning to get public service loan forgiveness, and then they didn't get it. 99% of people have been denied the public service loan forgiveness they planned their lives around. Sure, you can be in income-driven repayment and be making technically zero dollar a month payments on your loans, but you've still got this screwed up debt-to-income ratio, you're

• 17:38Speaker 03

  still got terrible credit, it's still hanging over you, you know that you actually are worth less than zero. These fixes are complicated, they're bureaucratic, there are all of these unnecessary administrative costs, and it's like, I think the question we need to ask is like, why? Why put so much energy into fixing a broken student loan servicing system instead of just going like, let's go back to something that's obvious, which is funding education in a different way?

• 18:04Speaker 02

  If you were to forgive all student debt now, it's absolutely regressive. It's not regressive because some rich people would get some money. When people talk about the racial wealth gap, about half of black adults have never been to college. They don't have any student debt. If we wanted to give everybody a $10,000 distribution, I think that would be a great idea.

• 18:23Speaker 03

  I do too. I would do that too.

• 18:24Speaker 02

  I'm not worried about the fact that we're going to give $10,000 to Bill Gates. That's okay. Give it to everybody, but do not exclude the people who never went to college. Many people never went to college because they couldn't manage to afford it for lots of reasons. They deserve this $10,000 handout as well. Think about the money we're talking about spending on helping people with children. We've got to do something about child poverty. And if we do something about child poverty, it's going to help people get to and through college. I mean, I think picking on the idea that it's going to help some rich people, that's not the problem. Public service loan forgiveness, no argument. It's a disaster. Of course, we have a huge problem with that. If you forgave all student debt today, then what about tomorrow?

• 19:06Speaker 02

  And again, free tuition is not going to eliminate borrowing. People are going to borrow for graduate school, for private colleges, and to live while they're in college. So what about the people who just paid off their loans? What about the people who are going to borrow tomorrow? You know, there are some people whose debt should be forgiven. So if you borrowed $10,000 and you've been trying to repay it for 10 years and you haven't made any progress, we should forgive it today. We shouldn't make you wait another 10 years. If you were the victim of fraud or abuse, we should forgive your debt. If you're a parent living below the poverty line and we gave you a federal loan so you could help your kid go to college, we should never have made that loan to you. We should forgive it. But we should not forgive the trillion and a half dollars of student debt and increase

• 19:49Speaker 02

  the federal debt that way and put all that money in the pockets of many of the people who have the most earning potential in our society.

• 19:57Speaker 03

  I think that misunderstands the true economics of it because we're not in a position where we're choosing between $10,000 to the people versus debt cancellation, right? Cancellation is a policy that can happen because of executive actions. So the Biden administration can do it now. It will increase the debt. The money for student debt forgiveness. It will give $10,000 to some people and not other people. But the money the Department of Education has lent to people is out the door. That money is already gone. And as you just said, we have systems that basically bake in debt cancellation or forgiveness. We're just punting it to decades in the future. Why not face the facts that the vast majority of this is not going to be paid off? When it is collected, it's through incredibly punitive means, right? We garnish the social security payments of elderly people. We seize their tax returns. We should not do that. We should not do that.

• 20:42Speaker 03

  We put people in default, as I was put into default, and then my principal increased. We have to understand that this money, when it is recouped, is recouped through these pernicious and punishing methods. Why do that? Why not just say, let's cancel this? Even if we canceled some of the numbers on the table, $10,000, $50,000, we would still have a student loan crisis.

• 21:04Speaker 01

  We're getting into solutions, and I like that we went to like our last point of solution of total forgiveness first. There are a couple of stops on the road before we get there. And you just mentioned the most recent proposal from President Biden, which is a $10,000 unilateral cancellation for all federal borrowers, which would wipe out the debt for about 15 million Americans, which is not a small number of people. So Astro, what are your thoughts on $10,000? I feel like we're doing a bit of an auction here, but $10,000, take it or leave it.

• 21:35Speaker 03

  Oh, absolutely. I mean, that's part of why there does need to be a group holding down the corner for full cancellation. There has to be people on that flank. I mean, $10,000 is nibbling around the edges. I think it shows, though, for me as an organizer in this space, I feel that the fact President Biden ran on that is a testament to the work of debtors standing up for themselves and saying this is a crisis. I do want to flag that he also ran on the promise to cancel student debt for undergraduates who attended public universities and historically both colleges and universities as long as their income was under $125,000. So that's more substantial.

• 22:11Speaker 01

  Some of the other proposals that have come from Senators Schumer and Warren talking about canceling $50,000 in student loans, again, this kettle auction continues, but for those who earned less than $125,000, what do you think of these positional moves, Sandy?

• 22:26Speaker 02

  Well, I would rather have them forgive $10,000 of everybody's debt than $50,000 of everybody's debt. And the share of people who owe $50,000 is small, but again, I want them to give $10,000 to everyone. And it would be a very interesting question, how many people would use the $10,000 to pay off their student loans? First of all, in terms of a stimulus or helping people right now, let's acknowledge that since the beginning of the pandemic, no one has had to pay their federal student loans. All of those payments have been deferred. You don't have to pay them, no interest is accumulating. And if they forgive your debt, they're not handing you money. It's a stream of you don't have to make future payments.

• 23:06Speaker 02

  So in terms of helping the economy right now, it doesn't help anybody right now because nobody's making those payments.

• 23:13Speaker 01

  When I get the email that tells me that my loan forbearance on my federal loans, because I also have private loans, which is a more rare scenario, but, you know, very fun for me, when I get that email telling me I don't need to make those payments, I do think, awesome, that means that when at some point we are allowed to go places, I would have the opportunity to go somewhere or buy a thing.

• 23:37Speaker 02

  Right, right.

• 23:38Speaker 01

  Or when you think about the budgeting that is done, I have spent the last decade of my life figuring into my budget that here's how much money I make, here is how much money I actually make because of my student loan payments.

• 23:50Speaker 02

  But look, thinking-

• 23:51Speaker 01

  If I get that back, I am thinking, we could do X thing, we could do Y thing. So I just want to press you a little bit on this because it is not that- I am literally being given $10,000. It is that my possibilities, my economic possibilities widen.

• 24:09Speaker 02

  You will be a happier person, absolutely. I don't regret you that.

• 24:13Speaker 01

  I love being happy.

• 24:14Speaker 02

  But the people who are struggling most now, look, think about who's lost their jobs during the pandemic.

• 24:20Speaker 01

  Right.

• 24:20Speaker 02

  Think about who's not sitting on Zoom, you know, going to work. I mean, the people who are struggling the most now are not the people, most of them don't have student debt because they didn't go to college. Some of them do, but mostly they have lots of other problems. They have other kinds of debt. They can't pay their electric bills. So if you want to have an agenda, I mean, maybe we can argue about whether we could do everything, everything, everything we want to.

• 24:43Speaker 01

  I want to invite you into the debt collective where we, we organize to cancel all these other kinds of debts, Sandy, because I'm 100% with you that all of these other debts need to be canceled. But people, student debtors, hold these other debts. They hold medical debts. They hold credit card debt.

• 24:55Speaker 02

  But if you cancel all debt, you got to solve the problem in a different way. If people can't borrow money, people aren't going to pay back their loans. Nobody's going to lend them money. And we have loans for a reason, because people can distribute payments over time. We need a much more equal society, but not allowing people access to credit is not going to be a solution long-term to problems. And everybody needs a home. Everybody needs a place to live. Why shouldn't we do away with housing debt? Let's forgive all the mortgage debt.

• 25:30Speaker 04

  Hey, this is Connor Conlon from Brooklyn, New York. The thing I've been arguing about is student debt forgiveness. And the way that I've been coming at this is more from the social democratic perspective, someone who believes in a strong welfare state. By that metric, I see student debt forgiveness as more of a bailout to the elite institutions than a bailout or a forgiveness to the students who are ripped off by them. Thanks.

• 25:56Speaker 01

  What are you arguing about with your family, your friends, your frenemies? Tell me about the big debate you're having in a voicemail by calling 347-915-4324. And we might play an excerpt of it on a future episode.

• 26:19Speaker 01

  One of the pieces of this is that only about 62% of people graduate from college with a bachelor's degree, they do it in six years. About 38% withdraw, and millions of those people who withdraw, who did not finish college, who are the people who are likely with, by this pandemic, being most impacted, the people who are not lucky enough to be able to do so much of their work at home, or for whom working at home does not exist, they still have millions of dollars of student loan debt. But for the idea of a proposal that says, "We will forgive about $50,000, but if you make less than $125,000 a year", does that make that more equitable in your eyes, Sandy?

• 26:59Speaker 02

  It makes it more equitable, but there are a lot of issues. Like, for example, if you make $125,000 a year, what if, I mean, I think people who have been trying to repay for years and haven't succeeded because they have a long-term low income, need to have more debt forgiveness. But if you just graduated from college, and you're making less than $125,000 a year, this is a real windfall to you. So let's think about who really can't afford to pay. I don't want student loans to oppress people. People who drop out of college are the biggest problem, struggle the most, people who want to for-profit institutions. We have lots of problems that we have to solve, whether they're student debt or not. If you go to an institution that promises you you're going to get a job at the end

• 27:40Speaker 02

  of it, and you can't because they just are total rip-off institution, this is outrageous, and we need to do something about this, whether you borrowed money for it or not. So it's not going to solve those problems to just forgive the debt of people who just left those schools. We need to solve those problems. They're going to be with us until we address them head-on.

• 28:00Speaker 01

  It's not such a pie-in-the-sky thing to imagine that people aren't financing their education through student loans. This is something that exists in other countries. In the beginning, when student loans just began, they were conceived as like, a little bonus, right? I mean, Pell Grants typically covered tuition and gave people money to live on, so to address the like, how do people actually survive question. You know, loans are not the only way we can finance education.

• 28:24Speaker 03

  I think that that's really important to state. I wanted to say on the for-profit college front, I have organized for the last six years now with students who are defrauded by predatory for-profit colleges. And this is why I am so adamant about the fact that the attempts to fix and improve the program and create more oversight and have some laws or more information for borrowers, they don't work. The systems that the Department of Education are upholding are predatory. We've got millions of people trapped in huge debt for worthless degrees. And these for-profits are the logical endpoint of this system of loan-financed education and treating education as an investment in a commodity and not a public good.

• 29:07Speaker 03

  So I am very familiar with the trials and tribulations of the most vulnerable borrowers. And what those borrowers have helped teach me through my organizing with them is that we need a solution that actually helps everyone. We need to stop trying to divide people, you know, and say, oh, actually, well, let's not talk about these, this kind of debtor or that kind of debtor. Because when you do that, when you divide everybody up, it makes the problem seem smaller than it is. The fact is that for-profit college students and, you know, doctors who can't pay their debts all owe money to the same system. They're all connected to the Department of Education. Most of them have federally secured loans. And the same solution will help everybody, which is full debt cancellation and fixing this solution, going back to free public higher education in the future.

• 29:52Speaker 02

  It's not a solution. It's not to suggest that the problems of people defrauded by their for-profit institutions are the same as the problems of doctors who are right now in residency and owe $200,000 and are going to be neurosurgeons is absurd. I mean, they are such different situations. There are timing problems, there are problems of being cheated, and there are problems of being given opportunities. You make it sound as though it could just be a simple solution. It's not simple in the short term or the long term.

• 30:18Speaker 03

  But it's the problem of doctors who want to be general practitioners, doctors who want to not have to maximize their returns.

• 30:25Speaker 02

  There are first doctors who don't make a lot of money. There are lawyers who don't make a lot of money. But the idea that the average taxpayer should pay

• 30:34Speaker 02

  For people with lots of money to go make lots of money instead of using tax revenues to actually create opportunities for people is so much not a progressive idea.

• 30:46Speaker 03

  Education has a social benefit. We live in what we call a democracy. And I think if 2021 has taught us anything, it's that we want an educated populace, right? We want people to be able to learn, to learn how to think critically. So, public K through 12 education made sense in the industrial age, right? This is the 21st century. People need more time to learn, more time to explore, you know, and in more time to develop these critical capacities.

• 31:14Speaker 01

  I want to interrupt there because one of the challenges I have with this conversation is, should we be talking about greater access to education, which seems to be your point? Or is part of the issue that about six in 10 jobs require some education beyond a high school diploma? The fact that there are so many jobs, and I think we've all had them, where you were basically required to have graduated from college, even at no point did your college education. Let's just say that my history thesis on Nazi propaganda, before and after the Battle of Stalingrad, didn't really come up that much as a lot of my early jobs. So, is the challenge, everyone should have access to this education?

• 31:55Speaker 01

  Or, obviously, there are a lot of jobs that require different forms of occupational licensing, but there are a lot of jobs that perhaps shouldn't need people to have college educations in the first place.

• 32:07Speaker 02

  We should worry about both of these things. Of course, everyone should have access to this educational opportunity, but it shouldn't be a requirement for a living wage, right? Education, of course, has social benefits, and even the private benefits, everyone should have access to, but it has private and social benefits. It's not a public good. Like, if I go to college, You live in a better, more educated society, but I get most of the benefits. You don't get equal benefits, and you're indifferent to whether it's me or you who goes to college. But the idea that we don't have good opportunities for people who don't go to college. Lots of people, when they graduate from high school, we hope they graduate from high school. Not everyone does. They don't want to go sit in a classroom again. They need an apprenticeship. They need opportunities for good jobs that don't require them to go to college.

• 32:52Speaker 02

  And we absolutely need to focus on that. But we also need for them to have that choice where it's not financial constraints that make it impossible for them to go to college. So I think your dichotomy is like you're pointing out two things that we need to do. And if wages were not so unequal, if we didn't live in a society where the people at the top of the distribution earn so much more than the people at the bottom, then you could make a choice based on what satisfies you in life, instead of thinking you're going to be poor if you make the wrong choice.

• 33:21Speaker 03

  We agree on this. Good jobs don't appear because you've minted a lot of diplomas, right? Like, we need to figure out how to create better jobs, create equity in the workforce. This isn't something that just is solved by education policy. And I totally agree that you shouldn't need this arbitrary credential to get the job that a generation ago you could get right out of high school. So I think they're complementary problems. They overlap. And we've been on the wrong track by thinking that, oh, we can solve this problem of employment and wages just by pushing people in the door of colleges, whatever the cost is.

• 33:57Speaker 02

  But I do think that thesis that you wrote probably has helped you more than you think. It's not just about the subject matter. It's about how you learn to write and think and create, and I'm sure you're using that all the time.

• 34:07Speaker 01

  Horrifyingly, the subject matter came up a couple of times. I really wish it wouldn't have.

• 34:13Speaker 02

  Okay, see, so it was.

• 34:14Speaker 01

  So let's talk going forward, because, Astra, you've mentioned the idea of free public college for all. And I want to talk about solutions that are actually possible with the Congress that we currently have. So, Sandy, I'd like to start with you. If total cancellation isn't effective, if free public college, I'm going to guess, is not what you're thinking, what do you think we can do to reform higher education so more people have access to education but aren't crushed by debt? And how can we do so in a way that's fair?

• 34:44Speaker 02

  So I think that the federal government can play a larger role in funding public higher education by providing money to states that matches state appropriations so that states will have more incentive to more generously fund public higher education. The states don't just need to lower tuition, they need resources to make these institutions able to serve students. One of the problems with some of the free college proposals is, well, how are we going to educate all those students? How are we going to give them a quality environment? So the federal government can do that. The federal government can certainly increase the size of the Pell Grant, which is financial aid for low and moderate income students. So students will have more grant aid to pay. And the federal government must increase its oversight and regulation of the for-profit

• 35:27Speaker 02

  college industry and hold colleges and universities accountable for the quality of the education that they provide to students.

• 35:34Speaker 01

  So this is a thesis I am completely prepared to be incorrect about, and you both can tell me that I'm wrong. It's an exciting part of the show. Because there is an expectation that you will be able to access student loans, they can set the price at whatever they want it to be, $35,000 a year, $45,000 a year, with the understanding that you will probably qualify for federal loans. Without those loans, with those eliminated, do you think that colleges would lower their prices?

• 36:01Speaker 02

  There's been a lot of research on this, maybe a little bit. Certainly, the for-profit sector, there's a lot of evidence that you raise the loan limits, they raise their prices. But by and large, the answer to that is no, that's not what is determining college prices. I mean, if states would put more funding into higher education, then tuition in public institutions would be lower. But that is not what's driving it. And look, if we didn't have any student aid, some people want to abolish the Pell Grant for that reason, then probably prices would be lower, there would be fewer colleges and universities, and fewer people would go to college. Better we should have a little bit higher price and have educational institutions with resources that can educate students. Cheap isn't enough. It has to be, what are you getting for your money? So this whole focus on what's the price, and wouldn't a price of zero be great?

• 36:46Speaker 02

  It depends. It depends on what you're going to get for your price.

• 36:49Speaker 01

  Astra, I want to know what your thought is on, with eliminating loans, reduce the price of college, because colleges would know that you couldn't. Access a spare $20,000.

• 37:00Speaker 03

  I think we need state funding. We need federal funding for education.

• 37:04Speaker 01

  So it sounds like you kind of agree on that. More money for education.

• 37:09Speaker 03

  More money for education. And there's the 66 fixed proposal in California, which basically says for a small increase in your state taxes, we can reinvest in the California system. So I think there are state possibilities, even if we're not about to get college for all from this Congress, and I think that we're not. The fact we're not going to get college for all from this Congress is part of why the debt collective is pushing for student loan cancellation via executive action.

• 37:39Speaker 01

  Why free? Why free is the objective. I know you just said that we're not going to get it in this Congress, but I'm interested to hear why free at all.

• 37:48Speaker 03

  I mean, I hear in the word free a double entendre, right? So one is free as in cost, and the other is free as in aimed at freedom. This is actually about creating a free and equal population that is capable of governing itself. Again, to me, this ties back to my interest in my work on the subject of democracy. Now, what is society for? Canceling student debt in 2021 via executive action, which Joe Biden can and should do, is one way of saying, we've made a mistake. This has been a policy failure, and we're doing something about it. Of course, it's not the solution. We're figuring out what the real solution is. Let's do something as a society that's saying, hold on, this is out of control, just to show that we can actually admit our mistakes

• 38:32Speaker 03

  and take some little step to getting back on track and building a system that actually aims at equity and actually functions and isn't destroying people's lives.

• 38:42Speaker 02

  So I think, you know, we share a lot of the same goals in terms of the kind of society we would like to see. I think the idea of forgiving all student debt is so inequitable. It offends me so much to think of it as progressive because I want people to be thinking this way about policies that will really help the people who need it most. And the people who need the most help are not the people who have large Amounts of student debt. So it's just a difference in what we see as a solution and a constructive step on the road to building a society where more people have equal opportunities and where subsidies just, you know, go mostly to people who really

• 39:23Speaker 02

  need them, not to people who have had the biggest benefits from our society.

• 39:28Speaker 03

  But right now, we have a two tiered system where people who have family wealth get their tuition paid for. If you have student debt, you by definition do not have family wealth. Your parents aren't millionaires, they're not billionaires. And if you are economically vulnerable, if you are, as the statistics say, you come probably from a black or Latinx household, that debt drags you further and further and further into poverty, right? I mean, you know this. I know you know this, Andy. How bad the racial-

• 39:56Speaker 02

  What frustrates me, I'm sorry, but it's just that it is not true that people from affluent families don't have student debt. The people with the largest debts are people who went to medical school and law school and so on. And that's not the people from the low income backgrounds. So I agree with you about the plight of the people who cannot afford it. I agree with you about the racist who is huge. I mean, black students are disadvantaged in so many ways. And the student debt problem concentrated in that community is one that we have to address in lots of ways. But the idea that if you're not needy, you don't have student loans, that's just not the case.

• 40:32Speaker 03

  So I would like to rebargain with Sandy and say, okay, you said 10,000 at some point. I'm saying all, you know, let's meet at 75K. The research shows, the research shows that that's the ideal amount. So Senator Warren and Schumer are saying that they want $50,000 of debt canceled because of the racial wealth gap. The 50,000 is based on research from 2016. The researchers updated the number because debt has grown and they're now saying actually the optimal debt cancellation to close the racial wealth gap is 75. So that gives you an example of the acceleration we're facing here.

• 41:03Speaker 02

  How can the solution to the racial wealth gap be a policy that leaves half of African American households totally out?

• 41:14Speaker 03

  Because African Americans, because black people enter the workforce precisely because they need to compete on an even playing field with their white counterparts. And so they disproportionately.

• 41:25Speaker 02

  Most debt is held by white people.

• 41:27Speaker 03

  Well, yeah, because there are more white people.

• 41:28Speaker 01

  Also, speaking as a black person who went to college, black students are more likely to turn to student loans and are more likely to default on their loans.

• 41:37Speaker 02

  Absolutely.

• 41:38Speaker 03

  Exactly.

• 41:39Speaker 01

  The assumption here, I would think, is that this is not our only bite at the apple on trying to close the racial wealth gap. The idea would be we would do this, but also thinking about housing reform, occupational licensing reform, eliminating qualified immunity. But Sandy, you're shaking your head. You are still in disagreement here.

• 41:58Speaker 02

  It is true that more black students than white students borrow. We are not going to have a successful society unless we figure out how, look at the European countries that have student debt programs that work, they're income driven, they're not that different from ours, but they withhold it from your paycheck and it's automatic and you don't have to go through a bureaucracy. We can do that. We haven't chosen to do it, but we can do it and it will be a long term solution. If we can't structure good government programs, then we're in a total mess because we're not going to solve any of these problems.

• 42:29Speaker 01

  Astra, you are shaking your head vehemently. This is a very visual podcast.

• 42:33Speaker 03

  So vehemently. I mean, first I want to say that Derek Hamilton, who is the leading economist on the racial wealth gap, says cancel all student debt for the maximum benefit. And he would, I know, would also say, this is not our only bite at the apple, right? This has to be coupled with all these policies. Oh, I dream of some perfect bureaucracy where people take out loans and then they're automatically enrolled in the right payment plan. I mean, let's go back to reality. The nightmares that people are living in because of these programs just make me feel like, why would we aspire to making this Rube Goldberg machine work when we could fund things directly? We could give very generous Pell Grants. Let people have the space to live. That's other countries do that. What is society for?

• 43:18Speaker 03

  The stereotype of the doctor or the lawyer who might get their debts canceled is this canard that's gotta go. We know that law school does not necessarily mean you're gonna get a high paying job. If you want to go into public service, you're really, really underpaid. And the fact is, as a citizen of this country, I want there to be doctors and lawyers who aren't burdened by hundreds of thousands of dollars of debt and can serve their community. I'm thinking of one member of the debt collective. His name's Armin Henderson. He's a doctor in Miami. He grew up in Philadelphia, black, just right. He family's right above the poverty line. He owes $600,000 for medical school and he spends every day going out and giving homeless people tests for COVID. Right? I mean, why? So when you invoke this doctor

• 44:01Speaker 03

  who might get their debt canceled, I'm like, yeah, Armin would be free to maybe plan for his retirement or buy a house. It's not such a terrible thing in my book.

• 44:08Speaker 02

  Yeah, but we can't use anecdotes like this very remarkable, unusual person to set public policies. And if you forgave all student debt tomorrow, then next week, there would be people with new student loans. So

• 44:21Speaker 03

  But that's not a reason to keep people trapped, just because the system's not solved. We don't go, oh, well, you might get a break.

• 44:27Speaker 02

  It's not just, it's, it's, we're talking about a huge impact on the debt and the deficit and limit. And if you don't think Congress is gonna do less for people in need because we just added, you know, a trillion and a half dollars over time to

• 44:42Speaker 03

  Student debt is out the door. It's not the same type of spending. That, that is out the door and the government knows it's not gonna get it back. That's why there's IDR. That's why there's loan forgiveness.

• 44:50Speaker 02

  No, the government expects to get student loans repaid.

• 44:53Speaker 03

  It doesn't expect to get all of it back. The official estimates do not claim that all the money's coming back.

• 44:57Speaker 02

  No, all the money's not gonna be paid back, but a significant share is. And on average, they expect to make money. And when it doesn't get paid back, it adds to the debt. And we're not to the point where Congress says, hey, people need that. We're just gonna do it. There are absolutely trade offs and we have to acknowledge those trade offs.

• 45:13Speaker 03

  Okay. This is the most I've thought about my own student debt and anyone else's student debt in a very long time.

• 45:21Speaker 02

  Welcome to my life.

• 45:23Speaker 03

  Yes. Student debt. It occupies your mind.

• 45:31Speaker 01

  Dr. Sandy Baum is a non-resident senior fellow at the Center on Education, Data, and Policy at the Urban Institute. And Astra Taylor is a documentarian, author of the book Democracy May Not Exist, But We'll Miss It When It's Gone, and the co-founder of The Debt Collective. Thank you both so much for joining me today to talk about this issue.

• 45:49Speaker 03

  Thanks so much.

• 45:49Speaker 01

  Thank you so much for having us.

• 45:53Speaker 01

  You can find links to their op-eds about student loans in this episode's show notes. If Oprah's interview with Prince Harry and Meghan Markle has you in your royal feelings, do what I did last weekend and take a deep dive into the work of Dr. Lucy Whirlsley. She's a British historian who is the chief curator at historic royal palaces, and she happens to be the queen of royal history. If you're new to Dr. Whirlsley, I recommend you start with her three-episode mini-series, Secrets of the Six Wives, about Henry VIII and his ill-fated partners. You can find all three episodes on pbs.org. And I want to recommend you watch the work of our video team here at NYT Opinion. Our op-docs team spotlights short-form, opinionated documentary films from independent producers around the world.

• 46:38Speaker 01

  Two of the op-docs are shortlisted by the Oscars for Best Documentary Short Subject. Check out A Concerto is a Conversation and Hysterical Girl and all the other op-docs for free at newyorktimes.com/OPDOCSAwards. That's nytimes.com/OPDOCSAwards.

• 47:08Speaker 01

  The Argument is a production of New York Times Opinion. It's produced by Phoebe Lett, Eliza Gutierrez, and Vaschak Adarba. Edited by Alison Brujek and Paula Schuman. With original music and sound design by Isaac Jones. And fact-checking by Kate Sinclair. Special thanks this week to Shannon Busta and Vicky Merrick.

• 47:36Speaker 03

  You know, if only Sandy and I were the poles that were debating this, that would be excellent, so.

• 47:40Speaker 01

  That's right.

• 47:41Speaker 03

  Yeah.

• 47:42Speaker 01

  It's true.

• 47:42Speaker 03

  I think we could get comedy.

• 47:44Speaker 01

  But alas, there's other people.