“If you estimate the amount that people will end up earning as a result of the degrees, you can see that people who take on student debt are really going to end up well off on average,” McCluskey remarked. “The average person with a bachelor’s degree makes about $1.2 million more over their lifetime than someone with just a high school diploma. If you go to somebody with a professional degree — like a medical degree or a law degree — they end up making about $3 million more over their lifetime than somebody with just a high school diploma.”
McCluskey pointed to Brookings Institution data showing that one-third of student debt is owed by the wealthiest 20% of households, while 8% is owned by the bottom 20%. “Wealthy people do take on debt, and a lot of that debt is for graduate school,” he added.
McCluskey said that without meaningful reforms to the federal student aid process, action to cancel debt — especially via executive order — would only serve to raise costs.
“It would clearly have negative, unintended consequences going forward of encouraging even more rampant price inflation than we’ve seen in college over the last several decades,” he said. “Anybody going forward will say, ‘You know, I should really be willing to take out a lot more debt because how could the federal government cancel all this debt before but then tell me they’re not going to do it?’ And that also means that colleges have a greater incentive to increase their prices, because they say, ‘There’s no way the federal government will not forgive the debt of the students who we take on.’”
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McCluskey pointed to Brookings Institution data showing that one-third of student debt is owed by the wealthiest 20% of households, while 8% is owned by the bottom 20%. “Wealthy people do take on debt, and a lot of that debt is for graduate school,” he added.
McCluskey said that without meaningful reforms to the federal student aid process, action to cancel debt — especially via executive order — would only serve to raise costs.
“It would clearly have negative, unintended consequences going forward of encouraging even more rampant price inflation than we’ve seen in college over the last several decades,” he said. “Anybody going forward will say, ‘You know, I should really be willing to take out a lot more debt because how could the federal government cancel all this debt before but then tell me they’re not going to do it?’ And that also means that colleges have a greater incentive to increase their prices, because they say, ‘There’s no way the federal government will not forgive the debt of the students who we take on.’”
Schumer Slams ‘Fat Cats’ Who Don’t Want To Cancel Student Loans
Senate Majority Leader Chuck Schumer (D-NY) argued last week that student loan cancellation is “not a problem that concerns the wealthy.” The comment came as Democratic lawmakers continue to evaluate policies that would scrap large amounts of student debt. The Biden administration is reportedly...
