You’re racist if you don’t cancel student loans

According to the Federal Reserve, over half of young adults who went to college during the 2018-2019 academic year took out student loans – that’s 54% to be exact. 

Of those, only 10% with a bachelor’s degree are behind on payments. 

Loans aren’t limited to just one group; students of all races, religions, ethnicities and socioeconomic backgrounds take them out. 

But, “Squad” member Rep. Ayanna Pressley (D-Mass) said that cancelling student loans and racism are directly correlated. 

“Even if we wipe out all student debt tomorrow, the devastating impact on consumers’ credit will remain for many years to come. Let me be clear, we must wipe out that debt,” she said in a speech at the Consumer Federation of America’s annual financial services conference last week, Just The News reports. 

“Student loan cancellation is a matter of racial and economic justice,” she continued. “Across our country, black student borrowers are forced to borrow more than their white peers, and are five times more likely to default on a student loan.” 

Essentially, if you don’t cancel student loans, you’re racist. 

Pressley, a member of the House Financial Services Committee, noted that she proposed the House-passed Student Borrower Credit Improvement Act, which she said would “establish a credit rehabilitation process for private student loan borrowers facing hardship, making students eligible to have all associated derogatory marks removed from their credit reports.” 

Senate Minority Leader Chuck Schumer argued in a recent interview that Biden could implement his student debt forgiveness proposal without congressional action. 

“I have a proposal with Elizabeth Warren that the first $50,000 of debt be vanquished, and we believe that Joe Biden can do that with the pen as opposed to legislation,” he said. 

While cancelling student debt may seem like a dream, logistically it wouldn’t be. 

Ultimately, it would create what economists call “moral hazard,” or in other words incentivizing bad decisions people make when they think someone else – taxpayers – will pick up the bill. Getting rid of student debt would also be taxable, which would cut into any stimulative effect on the economy. 

In terms of racial equality within education and the economy, it’s not about debt forgiveness; rather, Leo Terrell argues that school choice is the critical path forward.

“Education is the key to breaking the poverty cycle and the new civil rights issues that people of color face,” Terrell said. “A good education will give you every opportunity in the world and all the promises of this country,” he added. “School choice is the key to improve the economic opportunities of all Americans.”