“The overwhelming majority — 92 percent — of the $1.7 trillion of outstanding student loan debt is made up of federal loans. The federal government continues to lend upwards of $100 billion each year to students from all income levels. In fact, more than 50 percent of federal loans outstanding have been made in the last decade. In addition to the 43 million Americans paying their own federal student loans, 3.6 million parents owe $103.6 billion in federal Parent PLUS loans. Roughly half of federal loans are made not for access to undergraduate programs but to pursue graduate programs. These graduate school borrowers are often top earners in the economy after they complete their degree.
Many federal borrowers benefitted greatly from their undergraduate or graduate education and are managing their obligations well and without undue burden. There is a group that is struggling, however, and they are too often first-generation college students or those from historically marginalized communities. A study from the bipartisan Brookings Institution found Black graduates hold an average of $53,000 in student loan debt four years after graduation — almost twice as much as their white peers. In addition, Black families hold 19 percent of the federal loans made directly to parents, despite Black students making up just 12 percent of college students.
Put simply, the current system does too much for too many and not enough for those who truly need public support to access and complete college. And without a focus on the front-end of the federal loan program, another generation of students and their families could very well be in the same situation, and we’ll likely be having the same difficult discussions 10 or 15 years from now.
There are a number of pragmatic steps that can break this cycle of federal student loan debt while protecting access to higher education for all:”