Solving student-debt crisis requires a ‘New Deal moment,’ former education secretary under Obama says
- Although recent graduates have an extended break on their student loan payments, college debt remains a substantial hurdle for nearly everyone with a degree.
- John B. King Jr., who served as education secretary under former President Barack Obama, says it's time to "correct the policy mistakes of the last 40 years."
- Since the 1980s, declining public funds have caused college tuition to skyrocket, leaving many families either with insurmountable student loan debt or unable to afford a higher education altogether.
Student loans remain a substantial hurdle for nearly everyone with a college degree.
For those currently struggling under the weight of education debt, President Joe Biden used his executive powers to extend the pause in federal student loan payments until September.
Nearly 43 million federal borrowers are hoping massive student loan forgiveness might be Biden's next major move on the debt problem.
"We have an opportunity to make this a New Deal moment," said John B. King Jr., who served as education secretary under former President Barack Obama, during a summit on the topic hosted by the Student Debt Crisis Center.
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President Franklin D. Roosevelt's large-scale relief programs in the 1930s, aimed at restoring financial well-being after the Great Depression, fundamentally changed the government's role in American lives.
Broad-based loan forgiveness under Biden would be a modern day parallel to those New Deal policies, he said.
This is "a moment for our country to actually take on some of our deeper systemic challenges and correct the policy mistakes of the last 40 years," King added.
Since the 1980s, declining public funds have caused college tuition to skyrocket, leaving many families either with insurmountable student loan debt or unable to afford a higher education altogether.
At private four-year schools, average tuition and fees rose 213% in the last 40 years. Tuition plus fees at four-year public schools jumped even higher — 300% over the same time period.
Including room and board, books and other expenses, families with students in four-year private colleges now spend about $55,800 annually in 2021-22; at four-year public colleges, it is more than $27,300, according to the College Board.
Most make it work through a combination of resources, including income, savings, scholarships and loans, the latter of which has brought the country's outstanding student debt balance to more than $1.7 trillion.
Still, nearly two-thirds of parents are worried about being able to cover the cost of higher eduction, according to a separate report by Discover Student Loans.
"We haven't focused, as a society, on the way in which the student loan system is not delivering on the goal, which is for higher education to be a pathway to opportunity for all Americans," King said.
"That's the fundamental data point that we seem to be ignoring."