Student Debt Cancellation IS Progressive: Correcting Empirical and Conceptual Errors

June 8, 2021

Americans now owe $1.7 trillion in outstanding student debt. This astounding figure and its rapid growth in recent years have led activists, policymakers, and political leaders to call for the federal government to provide relief to borrowers by cancelling student loans. For example,  Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) have called on President Biden to cancel up to $50,000 of federal student loans per borrower. However, opponents have argued that doing so would be regressive because it would involve a public transfer to a relatively well-off group—those with some college education.


In “Student Debt Cancellation IS Progressive: Correcting Empirical and Conceptual Errors,” authors Charlie Eaton, Adam Goldstein, Laura Hamilton, and Frederick Wherry examine the argument that student loan cancellation would be a regressive policy and show how it arises from several empirical and conceptual errors. The authors conclude that student cancellation can, in fact, be progressive and that more substantial cancellation policies would be more progressive. The reason for this progressivity is simple: people from wealthy backgrounds (and their parents) rarely use student loans to pay for college. 

Through examination of five common mistakes that have led some to conclude that student debt cancellation is regressive, the authors show that student debt cancellation would provide more benefits to those with fewer economic resources and could play a critical role in addressing the racial wealth gap and building the Black middle class.

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