Debunking the primary myth about student debt cancellation

Unfortunately this will very likely not suffice to make it more of a priority for Pres. Biden.

In recent years, many centrist economists have claimed that canceling student debt is economically regressive in that it would disproportionately favor higher-income households. Yet, study after study has revealed that this is not the case. In particular, a new study by the Roosevelt Institute explains that the “regressive myth rests on a series of misleading methodological foundations,” demonstrating that, contrary to these regressive claims, student debt cancelation at each proposed level of cancelation — Biden’s $10,000 proposal, Warren and Schumer’s $50,000 proposal, or the Institute’s own proposal of $75,000 — would see those most economically marginalized benefiting the most...

By looking at the share of wealth, not just student debt in absolute numbers, it becomes clear that borrowers in the lower percentiles are much more burdened than their counterparts in the higher percentiles. In other words, student debt makes up a larger share of their annual household incomes or share of household wealth compared to higher percentile households which makes repayment difficult and almost impossible. This is precisely why the study finds that the greatest benefits of student debt cancelation accumulate to those in the bottom 40 percentile for all racial groups. Moreover, by examining the distribution of student debt by wealth and race instead of the standard income variable, cancelation provides ample evidence that the racial wealth gap would narrow in the process. - Truthout