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We Need an Immediate, Equitable Response to Student Debt

Equitable Growth Oct 25, 2020
This article is deemed a must-read by one or more of our expert collaborators.
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We Need an Immediate, Equitable Response to Student Debt Giving Compass
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Giving Compass' Take:

  • An article at Equitable Growth looks into developing a meaningful response to student debt, which is rising exponentially in the United States, especially among marginalized communities.
  • How might the coronavirus pandemic influence rising student debt? What can you do to support equitable relief for households with deep levels of student debt?
  • Read about how COVID-19 is impacting student debt in low-income households.

Today, about 43 million adults in the United States collectively hold $1.5 trillion in federal student loan debt and an additional $119 billion in private student loans not backed by the federal government. Student loan debt is an issue for many U.S. households, but it is becoming an especially acute problem for heads of households who are low-income, Black, or Hispanic.

The new data show that student debt-to-income ratios crept up over the past two decades and now average 0.56 among adults who have any student debt. In this issue brief, we report mean income divided by mean debt to reduce the influence of large outliers and look at people between the ages of 25 and 40 to roughly capture the generation that has been most affected by climbing college costs while excluding those who are just starting out their careers and therefore have especially low incomes.

Our analysis demonstrates that the student debt burden in the United States falls most heavily on those U.S. households in the bottom 50 percent of the income distribution—and even more on Black American households. Measures to alleviate these student debt burdens—via income-based repayment plans and one-time forbearance policies enacted by Congress amid the coronavirus recession—mitigate these burdens only on the margins. We detail these findings from the new 2019 Survey of Consumer Finances and conclude with some analysis of student debt forgiveness programs based in these data.

The creeping increase in student debt-to-income ratios is evidence that the problem should be tackled now, before the student financial aid system becomes more dysfunctional. Federal support would ensure that no one is unable to get a college education due to their parents’ financial circumstances, and that the nation continues to build a well-educated workforce.

Read the full article about developing a response to student debt by Raksha Kopparam and Austin Clemens at Equitable Growth.

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Learning and benchmarking are key steps towards becoming an impact giver. If you are interested in giving with impact on Higher Education take a look at these selections from Giving Compass.

  • This article is deemed a must-read by one or more of our expert collaborators.
    Click here for more.
    Facebook’s Latest Higher Ed Push Part of Broader Trend

    Giving Compass' Take: · Facebook will partner with 20 community colleges come the end of 2018 in order to provide education opportunities and skills in digital-literacy for small-business leaders. According to EdSurge, these partnerships are part of a larger trend of companies in Silicon Valley to shape curriculum around their products and develop the workforce. · Why are tech companies, like Facebook, investing in workforce development? And how will that influence the way nonprofits approach this space? · Facebook is not only partnering with schools to further higher education, the social platform plays a role in education itself. Learn how students and educators use Facebook in school. Facebook is teaming up with community colleges as part of a nationwide effort to teach digital-literacy skills to small-business leaders and others in cities. This week the company announced that it will add 17 more community colleges as partners by the end of 2018, for a total of 20 partnerships. An example of an already existing community college partnership is with Central New Mexico Community College, where Facebook has been working on a new Digital Marketing Certificate program, and has offered 32 scholarships for students to attend the institution’s “Deep Dive Coding Bootcamps.” Facebook has announced that it has added Bunker Hill Community College and Roxbury Community College as partners, both in Boston. Facebook has not yet decided the nature of those partnerships. Parisa Zagat, policy programs manager at Facebook, says the partnerships will involve working with the community colleges’ current offerings and resources to add content from Facebook. The social network is also working with another company, Entangled Solutions, to establish the partnerships and work with the institutions to create curriculum. Facebook has yet to select the remaining new colleges for the program. Read the full article about Facebook's higher ed push by Tina Nazerian at EdSurge.


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