Student Debt Cancellation IS Progressive: Cancellation as a Tool to Address Racial and Economic Inequity

Despite some claims to the contrary, the empirical evidence on student debt cancellation suggests it is a progressive policy with the potential to address long-standing racial wealth inequities. A recently published Roosevelt Institute report found that broad-based federal student debt cancellation would most benefit those with the fewest economic resources, particularly Black and brown borrowers, and would operate as an effective tool to grow the Black middle-class. Using data from the 2019 Survey of Consumer Finance to analyze models of student debt cancellation in the contexts of both wealth and race, the report shows:

• Student debt cancellation will have a greater impact on less wealthy borrowers.
• Student debt cancellation will have a greater impact on Black and Latinx borrowers than on white borrowers.
• A substantial student debt cancellation plan could be a powerful tool to grow the Black middle class and address the racial wealth gap.