NationSwell Leaders on the Biden Administration’s Student Debt Forgiveness Plan

On August 24, President Joe Biden’s White House announced intentions to ease student debt obligations by up to $20,000 for millions of Americans. Early details of the plan included a commitment to forgive up to $10,000 in federal student loan debt from the U.S. Department of Education for any borrower who earned less than an adjusted gross income of $125,000 ($250,000 for married couple filing jointly or head of household) in either 2020 or 2021, with Pell Grant recipients reportedly eligible to receive an additional $10,000 in relief on top of that.

While the finer points of the new debt forgiveness plan are still being hammered out, the measure is already set to have sweeping implications for those who qualify. To help make sense of the policy, NationSwell reached out to our community of experts for their reactions, and to ask if the plan goes far enough towards ensuring a more equitable playing field for millions of debt-saddled Americans.

Here are some of their responses:

NationSwell: What does the student loan forgiveness news mean in practical terms, for both workers and students? 

David Shapiro, CEO of MENTOR
Similar to the enactment, further guidance, and activation of the Public Service Loan Forgiveness over the last year, this is another opportunity for economic relief and increased stability for folks who work for non-profits and anyone looking to start a career in the sector. It is also important to note that it will affect people of all ages, not just the person who is receiving loan relief. Economic relief for parents and spouses can affect whole families and communities. Student debt burden has also often been intergenerational as well. Awareness is crucial so that folks get the full benefit of this opportunity, and that’s where community-based organizations, mentors, and others need to spread the word and help folks access this.

Mohan Sivaloganathan, CEO of Our Turn:
We need a future-facing lens with respect to student debt. President Biden’s announcement provides current day relief for past issues, but the structural issues that perpetuate racial inequity still exist — such as students of color lacking financial, college, and career planning resources in middle/high school (a stark contrast to white and/or affluent students).

Zeeshan Ali, a former Our Turn student leader who recently wrote a piece on student debt:
For both workers and students, such forgiveness provides a great opportunity for upward mobility and financial sustainability. Whether it be $10,000 or $20,000, those amounts mean the difference between eating three meals a day or going hungry, being able to pay rent or becoming homeless, buying a car or walking miles to work . For current and prospective students, I believe it generates ambition within them to continue their pursuit of higher-education, knowing that attending a college is within their reach .With hope that such a culture of affordable education is prolonged, I foresee an increase in minority enrollment in educational institutions, thus closing the wealth inequality gap. Workers will feel that relief as well: I know of many friends who are working jobs that do not interest them, however, the pay of such jobs helps with their student debt. With this forgiveness, workers can have more flexibility in their career paths, and it can enable them to work in a field they want to, vs. one that they have to.

Martin Kurzweil, Vice President of Educational Transformation at Ithaka S+R:
While there are some open questions about when it will take place (as it will likely be challenged in court) and how it will operate, once in effect, President Biden’s loan forgiveness order would completely wipe out debt for millions of borrowers, many of whom have not completed their degree, are not recognizing the value of their investment, and have been shut out of ineffective existing options for reducing or cancelling their debt. Getting out from under that burden will allow those individuals to make family, financial, and educational plans that their debt has put on hold. I do worry that the forgiveness program, as seemingly simple as its criteria are, may prove administratively complicated — the process will need to be carefully designed to ensure that it does not put bureaucratic barriers in the way of individuals who would otherwise be eligible. The more the Education Department can process the forgiveness automatically, using information it (or other branches of the federal government) already has, the better. Although debt forgiveness doesn’t address the ongoing accumulation of new debt, it does put greater pressure on the administration and Congress to address problems of college affordability, wasted individual expenditures by those who don’t complete or get a credential of value, and ongoing processes for ensuring repayment and interest accumulation aren’t overwhelming. The administration’s announcement included some indications of how it plans to address income-based repayment, public service loan forgiveness, and institutional accountability, but a lot more detail is needed on those plans.

Jean-Claude Brizard, President and CEO of Digital Promise:
In many countries around the world, students don’t exit formal education saddled with debt. In practical terms, students can spend more time building the foundation for economic security and not worrying about repaying a loan that often greatly exceeds their annual income. It also allows some to enter graduate school and further their education. 

NationSwell: What are some of the next steps we’ll need to take in order to advance educational and workforce equity?

David Shapiro, CEO of MENTOR:
Driving equity is about culture, structure, and systemic examination and change. We have to look at the barriers and biases that drive access, engagement, and retention. These could be economic, process driven, geographic, representative, along with other factors. And it requires deep listening, action orientation, benchmarking, communication, and marking progress and setbacks. It is a consistent pursuit and while there may be milestones, there is not an endpoint.

Dr. Noel Harmon, President and Executive Director of APIA Scholars:
We are grateful for the Biden administration’s recognition of the crippling effects of student loan debt, especially for the relief that will be directed towards the most under-represented and disadvantaged students in the educational process. While we appreciate that this is progress in providing aid to those who are most in need, we also feel that there are core problems that remain unsolved and must stay in the forefront. We need to continue to address systemic issues impacting educational equity, including financial barriers, access, and support.

Zeeshan Ali, former Our Turn student leader:
Outside of the student debt crisis that still remains, we must provide resources to marginalized communities in the form of community building, career guidance, and most of all, financial investments. I have seen it in my hometown of Palm Beach, Florida: There are mansions on one block of the street, but if you drive a block or two away, there are houses with broken windows, rundown schools, and mold-ridden recreational centers. We must allocate money towards such poverty-ridden areas to build better institutions that encourage personal development — in areas of both education and career, we need to reaffirm to the younger generation that they are not forgotten, nor do they mean any less than a student who lives in the wealthier part of town. And above everything else, we must make progressive change together, on every level. From the grassroots organizer to the President of the United States, there cannot be change if we are not unified in our efforts to make the world a better place, a place that promotes inclusion, offers opportunities of growth, and relentlessly fights for equity, for this generation and those to come. 

Mohan Sivaloganathan, CEO of Our Turn:
We need to invest in reframing the narrative around education and race. Too often, education is viewed as a critical lever for upward mobility and success — UNLESS — it is a Black, Indigenous, or Student of Color, and suddenly they are viewed as asking for a handout. The elimination of predatory higher education practices — while addressing an unjust playing field leading up to higher education — can actually forge a more prosperous, inclusive, and healthy country.

Jean-Claude Brizard, President and CEO of Digital Promise:
We need to make college more affordable and create better pathways from education to a meaningful career — one that puts young people on a path to economic security, well-being and personal agency. The Education Secretary’s push to greatly increase PELL is one good step in that direction. 

Martin Kurzweil, Vice President of Educational Transformation at Ithaka S+R::
There’s so much to do! Focusing on the federal and state level, the federal government and states ought to orient their spending and policies toward providing value with their investments in education — improving affordability as well as attainment of credentials that have labor market value. An important step is providing adequate resources to public institutions, especially those that serve large populations of students of color and lower-income students (which currently are less resourced than those serving wealthier, whiter student populations). An important issue that affects attainment is that the majority of students will earn college credit and other forms of validated postsecondary learning from more than one source, and we are terrible at reconciling all that evidence of learning and enabling seamless transfer — it results in a huge waste of time, money, and effort, and it disproportionately harms people of color and those from lower-income backgrounds. Streamlining transfer by aligning policies, providing better access to information and guidance, and reducing administrative barriers will benefit millions of individuals.

3 Colleges That Have the Formula for Making Higher Education Affordable

Just about every news story reporting on this country’s college debt climate uses the same word: crisis.
It’s an accurate descriptor — or so the numbers seems to indicate. Public college tuition costs have risen 250 percent over the last 30 years, while median family income grew only 16 percent during the same period. The average student is looking at $26,000 of debt when they graduate. Even President Obama labels the situation as a crisis, as the poorest students are saddled with more and more debt.
In an effort to combat the problem, the Department of Education created the College Scorecard, which provides students and families with a new kind of ranking by taking into account graduation rates, financial aid offerings, post-grad earnings — and most importantly — average debt. On it, these three liberal arts schools stand out as valuable options for low-income students, thanks to their high graduation rates, low student loan debt and the percentage of students eligible for federal Pell grants, which are available to those whose family incomes do not exceed $30,000 a year.
In stark contrast to many other universities, each of these colleges keep their students’ loan debt at least 50 percent lower than the national average. How do they remain academically solvent while not piling debt on their graduates?

Berea students hang out between classes. Courtesy of Berea College.

Berea College, Berea, Ky.

If you’ve never heard of Berea College in Kentucky, keep reading. It’s the only residential liberal arts school in America offering a completely free education to its nearly 1,600 students.
As President Lyle Roelofs explains, “nearly everything is different.”
Like other colleges with strong financial aid programs, Berea is selective, but it isn’t need-blind. It only accepts students whose family incomes fall beneath an income ceiling, providing a higher education opportunity — as Roelofs puts it — “to students wouldn’t get one otherwise.”
Berea is a very efficient educational experience, says Roelofs. Each student works part-time while on campus, holding jobs in numerous fields, from woodworking to hotel administration, to contribute to the $27,000 to $28,000 annual price of school. “We’re never interested in whether we can send some money to shareholders at the end of the year… We are much more like an entrepreneurial business with the idea that profits and successes get ploughed back into the enterprise,” he notes. To cover costs, 75 percent of tuition is handled by the endowment the college has accrued over its lengthy history. Only 15 percent comes from loan sources, primarily Pell grants (99 percent of students qualify) and similar state grants. A third of students don’t borrow anything at all, with the remainder receiving an average of about $6,700 in loans, almost 4 times less than the national average.
Perhaps more important is Berea’s graduation rate: 64 percent of its students receive a diploma. The average graduation rate for similar-income students nationwide is a dismal 9 percent. Roelofs attributes this jump to the focus that the school puts on each student and their families.
But can every college follow the Berea model? It would take something of a paradigm shift in approach, admits Roelofs. “Institutions are usually quite preoccupied with dealing with immediate challenges; they don’t consider radical changes,” he says. Still, other colleges could consider a more frugal approach. “If you don’t charge tuition, you can make much more sensible decisions on what the students actually need,” Roelofs notes. “People don’t look the gift horse in the mouth.”
“One of my favorite sayings is that just because an education is free doesn’t mean you can cut the corners. It still has to be first rate. Otherwise, our students would finish in four years and have nowhere to go.” Which would defeat the purpose of a place like Berea entirely.

The campus at WIlliams College. Courtesy of Williams College.

Williams College, Williamstown, Mass.

Williams College, located in western Massachusetts, is tiny and idyllic. It’s also the top-ranked national liberal arts college by U.S. News & Word Report, and it is one of the 50 most expensive colleges in the U.S., with an annual price tag of around $65,000. But it has a need-blind financial aid policy, making the average loan debt just over $13,000 (about half the national average), and many of the students who qualify for financial aid (more than 50 percent are eligible) are free of loans altogether.
How does Williams do it? By maintaining a strong endowment and an individualized approach to financial aid packages, says Paul Boyer, director of financial aid at Williams.
As one of the first schools in the country to make available a net price calculator for prospective students, Williams tries to evaluate each student, case by case, to ensure it’s offering the best plan. The school also makes a concerted effort to recruit students from diverse socioeconomic backgrounds, seeking out lower-income applicants. About 20 percent of current students receive Pell grants, double the amount at most other liberal arts colleges — and it’s increasing. “It’s been rising maybe 1 percent per year,” says Boyer. That may not sound like much, but it’s a far cry from most other schools (including Harvard, which hasn’t been able to crack a 10 percent ceiling).
Earning an average income of $58,000 a decade after graduation, students that receive financial aid, in general, have little trouble paying back their loans. The U.S. Department of Education even ranked Williams in its top 23 schools with low costs that lead to high incomes.
 

A spring day at Amherst College. Courtesy of Amherst College.

Amherst College, Amherst, Mass.

There must be something in the water in Massachusetts: Amherst, number two in U.S. News’s liberal arts ranking, also comes with a $65,000 yearly price tag. But just like Williams, its need-blind financial aid opportunities — which 58 percent of students qualify for — minimize its real cost. In fact, what students pay, on average, is actually half of the annual sticker price: $33,000.
Amherst is strictly anti-debt. “The most distinctive thing is our approach of not including loans, as we meet students’ full demonstrated need,” says Gail Holt, Amherst’s dean of financial aid. About 70 percent of students graduate with no debt whatsoever.
That’s an achievement that Amherst should be particularly proud of, considering that college costs and incomes aren’t rising at the same level in this country. As a result, more qualify for financial aid, and resources must be distributed among a wider number of students. At Amherst, Holt and her team try to serve a full spectrum of families and financial capabilities. “The hardest part is meeting the needs of such diverse populations.” With 24 percent of students eligible for Pell grants, it seems to be making headway.
 
Fortunately, for their students, these three schools earn As in crisis management. Will other universities be able to make the grade?

Inside the Move That Saved 2,761 Students From Millions of Dollars of School Debt

Three years after the 99-percenters first rallied to close the mammoth gap between the insanely rich 1-percenters and everyone else, the Occupy Wall Street is still continuing its valiant fight.
According to NPR, Strike Debt, an offshoot of the Occupy movement, has announced that they purchased and erased $3,856,866.11 worth of private loans held by 2,761 individuals who went to Ev­erest College (a nationwide chain of for-profit schools that are shutting down left and right).
Here’s how the activists pulled it off: In the case of private loans (versus federally backed ones) when a student can’t pay back his or her debt, the original lender can sell it off to a third-party debt collector at a significant discount. Everest’s loan portfolio was potentially worth millions, and more unscrupulous organizations could have taken advantage of that. Instead, Strike Debt unleashed project Rolling Jubilee.
As the Guardian explains, “Rolling Jubilee bought the $3.8 [million] worth of student loans for a total of $106,709.48 in cash. That’s about 3¢ for $1 of student debt.”
MORE: Ask the Experts: How Can We Keep From Drowning in College Debt?
While $4 million is only a drop in the massive $1.2 million student loan bucket, Strike Debt’s move is not only much-needed relief for the nearly 3,000 Everest students that were completely overwhelmed by their debt, it’s an infuriating example of why the student loan industry needs major reform.
Ev­erest is one of the three schools owned by Corinthian Colleges Inc., which is facing 200 lawsuits and has been accused of a slew of unsavory practices by the U.S. Consumer Financial Protection Bureau, including predatory lending, blocking access to educational resources and withholding diplomas.
Awareness of the predatory nature of loans is key. Most 17-year-olds probably have no idea what they’re signing away when they enroll in college.
Strike Debt has now renamed Rolling Jubilee and turned it into a new project, The Debt Collective, which attempts to empower students to “renegotiate, resist, and refuse unfair debts while advocating for real solutions in­cluding free education and universal health care,” says Thomas Gokey, a Debt Collective organizer.
This is not the first time Strike Debt has relieved individuals of massive financial burdens. The social do-gooders have also claimed to wipe out a staggering $15,000,000 in personal medical debt over the past two years.
DON’T MISS: The Average College Graduate Has a Whopping $30,000 in Debt. How One Startup Is Helping Them Pay It Back

Finally, Some Tuition Relief For California’s Middle-Class Students

Guess which school is cheaper to attend for a middle-class student, Harvard or a California state school?
You’ve hit the nail on the head if you went with the Ivy League. As the San Jose Mercury News reported in 2012, even though Harvard’s annual tuition is around $36,000, its enormous endowment helps cut costs for middle-class students by more than half to $17,000. Meanwhile, due to skyrocketing tuition, middle-class students who attend Cal State East Bay pay $24,000. At UC Berkeley, tuition costs $19,500.
Although no one is playing a tiny violin for families that make $80,000 – $150,000 a year, middle class families are shouldering a heavy burden when it comes to college tuition. Their income bracket, unfortunately, disqualifies them from federal and state grants that are usually reserved for lower income students. This means middle-class students often take out giant loans — and we all know how that’s going for the country.
MORE: Ask the Experts: How Can We Keep From Drowning in College Debt?
But finally, some relief.
As the Los Angeles Times reports, California’s new Middle Class Scholarship will award tuition grants to an estimated 156,000 undergraduates. Up to $1,450 will go to University of California students, and up to $650 for California State University students.
Frank Ballmann, director of federal relations for the National Assn. of State Student Grant and Aid Programs, called the middle-class scholarship “groundbreaking” since it’ll reach so many students.
He added that other higher education institutions might just follow the state’s lead. “Even if [California] is the first, I suspect they won’t be the last,” Ballmann told the LA Times.
UCLA freshman Madison Acampora, whose family makes $96,000 annually, is likely to receive the scholarship. A little goes a long way, especially for her parents, who just paid for college for Madison’s two older sisters, too.
“I became used to not getting any money. So this makes me very happy,” she told the newspaper. “Even if it just helps cover my books and supplies.”
DON’T MISS: Ask the Experts: Why Should Americans Care About Income Inequality?

When This Guy Learned That Students Were Dropping Out Over Textbook Costs, He Vowed to Change the System

Before he became a celebrated inventor and surgeon, Dr. Gary Michelson put himself through medical school by working odd jobs — he drove cabs, washed cars and cleaned animal cages at laboratories. So he knew how hard it can be to get through college, and when he learned some kids who couldn’t afford textbooks were dropping out, he devoted himself to doing something about it.
Through his Los Angeles-based organization 20 Million Minds, Michelson is working to make education more accessible. “When I entered this, I thought I had a problem,” he told The Huffington Post. “And what I realized is, I had one leg of an elephant, and it really wouldn’t matter where you grabbed on, the thing is enormous.” Michelson invented a digital textbook system that would reduce students’ $700-on-average textbook costs to a one-time $60 waterproof reader. He also partnered with Dean Florez, the majority leader of the California State Senate, to create the California Open Source Digital Library. The library holds open source textbooks for the most popular college courses, and, combined with Michelson’s digital reader, could save college students $1,600 a year.
The idea, for Forez, is for students and teachers to cater instruction to their needs without excessive costs. “The premise of all our textbooks is that they are open,” Fores told The Huffington Post. “And open meaning from our perspective that, a faculty member or student could repurpose the information, they could reuse it, they could redirect it, and more importantly they can make it their own.”
MORE: Mindfulness Isn’t Just a Hot Trend. It’s Improving Low-Income Schools.

The Next Frontier in Crowdfunding: DIY College Scholarships

Fed up with the lack of scholarship opportunities at your school? Well, now even scholarships can be DIY thanks to Cabell Maddux, a recent Wesleyan University graduate.
Maddux and his friends started a crowdfunding system called Scholarships Expanding Education to help students pay for college. SEE flips the traditional scholarship crowdfunding model around by inviting donors to start a scholarship in their own name. Then donors can recruit other people to donate to the fund. The donor can set GPA limits and majors so that the scholarship can be catered to what he or she would like to see. “We noticed the buzz around crowdfunding for students with a couple of sites that started up years ago, and these were sites where students were creating their own profile. As students ourselves, we thought it would be so hard for us to sell our stories to 100 strangers,” Maddux told Fast Company. “So we came up with this concept of flipping this on its head, with starting with someone who’s essentially the giver, so the student isn’t having to mobilize this crowd of donors.”
SEE debuted last month with encouraging results. A fund set up for Maddux’s grandfather’s birthday has raised $550 in the last week. And SEE has raised $8,000 in scholarships for Harvard, Fordham, the University of North Carolina-Chapel Hill and Averett University. Maddux and his team have applied for nonprofit status hoping to make scholarship donations tax deductible. The team aims to get things running smoothly before Maddux goes to medical school next year. “We want to build and provide another access point to financial aid,” Maddux told Fast Company. “We want to make this simple for the schools as well.”
MORE: The Neediest Students Couldn’t Afford His Help, So This Test-Prep Prodigy Stepped Up

This Startup Helps You Crowdfund Your Life For the Next 10 Years

Founded by a team of former Googlers, Upstart is a crowdfunding platform for entrepreneurs and recent college grads that lets you raise money in exchange for a share of your future annual income. The idea represents a paradigm shift in higher education and in the way startups get funded. Many Venture capitalist firms profess to invest in entrepreneurs, but most firms are structured to invest in companies, not people. “It’s a combination of the money-raising power of crowdfunding platform Kickstarter and the professional networking benefits of LinkedIn,” according to USA Today. Perhaps the most disruptive aspect of Upstart is in the way we view continuing education. Many investors that end up backing individual entrepreneurs also sign up to mentor that person over the course of several years, which makes this new model especially appealing for those seeking an alternative to student loans.