Many new university presidents find that the bulk of their waking hours are spent thinking about finances, campus safety, student debt, university culture and raising money — rather than the actual education.
As president of Delaware State University, I know that my provost, academic deans, and world-class faculty have teaching and research well in hand. When I spend time with the amazing young women and men who attend my University, I am not worried about their drive, abilities, or the quality of the education they are receiving. These students are the future of the great pipeline of diverse leaders that America will rely upon for success in the coming decades.
If we can keep them in school by helping them avoid crippling debt.
That’s why President Joe Biden’s program of focused student debt relief is so important, despite the fact that a number of governors have already asked him to withdraw the proposal, ignoring the fact that it also benefits thousands of trade-school graduates in their states.
It is important to note that these 22 governors do not speak for all state chief executives, as many have come out in favor of student-loan debt relief, as has the National Governors’ Association.
The causes go back to 2008-2009, as Peter Cappelli, Director of the Wharton School’s Center for Human Resources argues: “One in five employees lost their jobs at the beginning of the Great Recession. This especially hit younger Americans, who “had their careers disrupted by it,” and “continues to delay buying houses, having children, and other markers of stable, adult life.”
In 2007, total US student loan debt sat at $545 billion; in 15 years that figure tripled to a staggering $1.75 Trillion. Meanwhile, the average cost of tuition at a four-year public or private institution only increased by 75% and 70%, respectively, between the 2005-06 and 2019-20 school years.
Meanwhile, State funding for higher education slumped dramatically. Beset on all sides by flagging tax receipts and increased need for social services, governors and legislatures around the nation cut higher education funding from a peak of $70.4 billion annually in 2008 to $56.6 billion by 2013, a figure from which, nine years later, it has still not completely recovered.
Federal research dollars also declined, and the number of students requiring Pell Grant assistance increased, but, as Quincy University President Brian McGhee notes, “That program, at one point, paid well over 70% of the average cost of a public university education, but that average has dropped to 30% in recent years.”
This left America’s low-resource and middle-class families, with incomes declining and savings often zeroed out, more dependent than ever on student loans to send their children to college. Between 2007 and 2013, annual borrowing increased from $75 billion to $125 billion. Though borrowing has decreased from its 2013 peak, it remains $20 billion higher than in 2008, with 5% fewer students in college.
More affluent households do generally incur higher student loan debt, but it is not nearly as crippling to them as far lower debt amounts are to students of color and all from low-income families. This is tied to America’s family wealth gap: According to the Brookings Institution, in 2019 the average white family owned assets totaling $188,000, while the average Black family’s assets reach just over $24,000. It is thus not surprising to discover that students of color have much higher debt-to-income ratios and take far longer to repay their student loans.
Here are the stark, disturbing facts that the 22 governors seem to ignore: Four years after graduation, 83% of white students will have already retired 12% of their student loan debt, while the average Black student will actually owe 12.5% more than the day they walked across the stage. The impact of these disparities? As many as 60% of Black students paying off student loans cannot afford to have a savings account, and home ownership is higher among white college dropouts than Black graduates.
I see this at Delaware State University every year. According to Forbes, the average Delaware college graduate leaves school with just below $39,000 in student loan debt (the 8th highest total in the nation), while the average Black graduate’s debt burden exceeds $52,000. That was what drove our leadership team in May 2021 to use CARES Act funding to forgive the outstanding debts of hundreds of graduating seniors Nearly two dozen HBCUs did the same, cancelling tens of millions in student debt.
Of the 43 million Americans who will qualify for student debt relief (including several million trade school graduates), many will see their debt totally eliminated. South Carolina estimates that at least 28% of its 729,700 borrowers will end up with zero debt. In my own state, about 36,000 of 110,000 borrowers will find their debts extinguished, and another 60,000 will be relieved of 40% to 50%. This will result in more people with more disposable income that will help drive state economies around the nation.
Biden’s student loan debt relief is tightly focused on the young Americans who need it the most, and whose talents, achievements, and economic stability we will all need as our nation heads into the middle of the 21st century. Governors who oppose this initiative — while failing to acknowledge that it also provides relief in each of their states for thousands of plumbers, carpenters, and construction workers who incurred student debt at trade schools — are short-sighted at best.
Delaware State University President Tony Allen chairs the President’s Board of Advisors on Historically Black Colleges and Universities and is a member of the Philadelphia Federal Reserve Community Advisory Board.
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