By Derek Barnes–
Education is inextricably linked to crime, poverty, and housing. Most agree that legislators must find ways to make quality education at all levels accessible and affordable for many more people. We expect our government to work and find ways to strengthen our economy, improve the quality of life, and increase public services for everyone.
Recently, President Biden signed, via Executive Authority through the Heroes Act, a program for student loan forgiveness—approximately $300B in relief. It was also a move to reverse President Trump and Betsy Devos’ efforts to dismantle protections for those carrying student debt. Doing this through Executive Authority makes it more difficult to overturn by future administrations. It’s an extraordinarily well-conceived program that will undoubtedly impact the economy positively and also help ease our housing crisis.
People who currently carry student loans may receive up to $20,000 in debt relief. Forty-five million Americans have student loans totaling nearly 1.75 trillion dollars. Graduating student debt has tripled since the early 1990s, and tuition costs five times more today than in the 1970s. The hourly wage in the early 1980s was about $9.40 per hour and today it is about $25.92 per hour. Clearly, U.S. wage growth has not kept up with the rising cost of education, housing, and other commodities.
Digging into the data more, we learn that the bulk of the debt is disproportionately held by Black and Brown people—specifically women, who earn less than their male counterparts. Fortunately, the relief is targeted to help these communities and has income caps as guardrails.
Both sides of the aisle are crying foul. Some liberals say it doesn’t go far enough and is a broken campaign promise. Many on both sides cite the unfairness of the relief program itself. Their justification is that “no one bailed me out or paid my debt.” What about those who have already paid off their student loans? This is a rhetorical question, but when did we become so selfish and shortsighted? If you were fortunate enough to pay off your student loans or privileged enough not to have any in the first place, congratulations. Many aren’t as fortunate or privileged. This is a welcomed relief for those saddled with student loan debt and lower-paying jobs.
Countless government programs have helped Americans find ways out of poverty and promote investments in our people and communities—often providing advantages to some groups over others. Why is student loan forgiveness different? It will deliver relief to many low-moderate income earners, mitigate the impact of ill-advised predatory loans, stimulate the economy with more spending, stabilize housing for renting families, and ultimately increase home ownership.
We issued PPP loans to millionaires and billion-dollar businesses. We pass trillions in tax cuts to the wealthiest among us, while 55 of the largest companies in America pay no federal taxes at all. We send billions of dollars in aid to other countries, but we can’t help our own people. The federal government delivered $50 billion to help households pay rent as part of COVID-19 relief packages. Where’s the same outrage over these programs? While other advanced countries have paid college for their citizens, we’ve cut social programs and educational funding over decades that historically gave Americans a path to the middle class and a competitive edge in the world. We wonder why we sit at the bottom of global rankings as an “advanced industrialized nation.”
Options for housing, long-term, and earning potential are linked to education. We’re also in a housing crisis in many U.S. metro areas. To solve today’s housing problems, we must think differently. In Dr. Jenny Schuetz’s recent book Fixer-Upper: How to Repair America’s Broken Housing Systems, she challenges the prevailing wisdom and outdated paradigms that have contributed to our current housing crisis. It is a catastrophe primarily installed by uninformed leadership, bad policy development, low inventory, low production, and stagnant wage growth. She suggests ways to mitigate the crisis, like providing more income and subsidies for renters. Canceling student debt reduces monthly payments and can make affording a home easier.
There’s another side to the housing equation. Dr. Schuetz understands the plight of small rental property owners too. If they are burdened with too many costs, including student loan debt, or cannot charge monthly rents that cover rising operating expenses, they sell the property or let units sit vacant. She also asserts that we must convince legislators that rent control is a failed 1970s idea that has done nothing to address the core issues driving the lack of affordability and inventory.
Putting more money in the pockets of people paying for housing by reducing college debt increases housing options and affordability. It also makes homeownership possible for many. Solving our education crisis with programs like student loan forgiveness can help us solve our housing crisis too.
Derek Barnes is the CEO of the East Bay Rental Housing Association ( www.EBRHA.com ). He currently serves on the boards of Horizons Foundation and Homebridge CA. Follow him on Twitter @DerekBarnesSF or on Instagram at DerekBarnes.SF
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Published on September 8, 2022
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