Why student loan forgiveness plan is bad for the poor and working class

Why student loan forgiveness plan is bad for the poor and working class

student loan debt

Why student loan forgiveness plan is bad for the poor and working class

Key Points

  • A core part of our mission at the Georgia Center for Opportunity is to give the poor and working class a leg up on the economic ladder.
  • White House plan unfairly penalizes the poor and working classes, which disproportionately do not have college degrees and have not attended any college at all. 
  • Instead of loan forgiveness, we should work with borrowers to structure their loan repayments in a way that’s manageable but also helps them honor their commitments.
This week, the Biden administration announced a plan to forgive up to $20,000 in student loan debt for millions of Americans. The plan applies to households making up to $250,000 a year (or $125,000 for individuals), an income threshold that targets the middle class and upper middle class and many high-earning professionals.

A core part of our mission at the Georgia Center for Opportunity is to give the poor and working class a leg up on the economic ladder. This doesn’t come through cycles of generational government dependence, but through career training and credentialing that provides the pathway to fruitful full-time work and, ultimately, a better life.

We believe the White House’s plan is wrong on many levels, but a top way is the way it unfairly penalizes the poor and working classes, which disproportionately do not have college degrees and have not attended any college at all. 

Many of these individuals are working service-oriented jobs, entry-level positions, or laboring in the skilled trades. They are paying taxes. Yet under the Biden administration’s plan, they will bear the burden of paying off the student loans of their wealthier neighbors through their tax dollars.

Here are four additional ways that student loan forgiveness is ill-advised:

  1. It will contribute to already high inflation

Another way this plan hurts the poor and working class is by increasing inflation. This demographic spends a disproportionate share of their income on essentials like food and gas that have seen the most dramatic price increases in recent months.

As the Brookings Institution points out, $10,000 in debt forgiveness “would involve a transfer that is about as large as the country has spent on welfare … since 2000 and exceeds the amount spent since then on feeding hungry school children in high-poverty schools through the school breakfast and lunch program.”

  1. It doesn’t actually forgive anything

The White House has labeled the plan a “forgiveness” of student loan debt. But in reality, this approach simply transfers the burden onto the backs of taxpayers.

  1. It penalizes hard-working Americans

We’ve already discussed how the poor and working classes are treated unfairly by this plan. But the unfairness extends to many middle class families as well who worked hard to pay off their student loans or their children’s student loans. Once again, government policy is punishing hard work.

  1. Finally, it does nothing to address the affordability problem in higher education

According to Forbes, between 1980 and 2020, the cost of a college education jumped 169%. Meanwhile, the economic value of many four-year degrees has declined. The rapid inflation in the cost of college is, in large part, due to rampant government subsidies in higher education. Forgiving student loans only makes that problem worse.

The Success Sequence is a formula that outlines areas we can work in that will reduce poverty.

The Success Sequence is a formula that outlines areas we can work in that will reduce poverty.

A better way forward

Instead of loan forgiveness, we should work with borrowers to structure their loan repayments in a way that’s manageable but also helps them honor their commitments. We should also work to find a way to lower the cost of higher education to make it more affordable and encourage high school graduates to consider stable, good-paying jobs that do not require expensive college degrees.



We Must Close The Grade Level Gap

We Must Close The Grade Level Gap

students elementary

We Must Close The Grade Level Gap

Key Points

  • Voters are not saying other issues, such as race and gender, are not important, just that learning loss is more important.
  • We can’t be thinking of this as a one-year catch-up.
  • There are other interventions that have been shown to have effects, it’s just that no single intervention gets you all the way. 

It has been well documented that school closing due to the pandemic caused students to lose ground (see here and here). Recent polling suggests that parents are very concerned about this learning loss and want political leaders to focus on this issue.

Consider this from The74Million.com:

Matt Hogan, a partner at Impact Research, said that it was striking to see Republicans seize an edge on an issue that “has historically been one of the Democrats’ strengths.” 

“There’s just a perception that Democrats’ focus on education is not where voters want it to be, which is helping kids make up the ground they lost,” Hogan said. “They think both parties are too focused on race and gender issues in schools, rather than focusing on catching kids up — but notably, they think that is true of Democrats even more so than Republicans.”

Notice that voters are not saying other issues, such as race and gender, are not important, just that learning loss is more important. Yet as we survey the political landscape, very few politicians or candidates are talking about what parents are most concerned about. 

Perhaps this is because there is no magic wand that can be waived to fix the problem. There is no list of “five easy steps to catch your kids up, and number four will blow your mind.” There are, however, things that can and should be done immediately.

Recently, Harvard economist Tom Kane produced a study of the impact of learning loss and proposed solutions. Kane’s research found that one-on-one tutoring was effective, but not effective enough to eliminate the learning loss for students in schools that were closed most of the 2020-2021 school year. Schools, he said, should plan on implementing learning recovery strategies for multiple years. Kane said:

So what can schools and districts realistically be expected to do in this situation? 

We can’t be thinking of this as a one-year catch-up. If we really are committed to making students whole and eliminating these losses, it’s going to be multiple years. There are other interventions that have been shown to have effects, it’s just that no single intervention gets you all the way. 

In March, Congress passed the American Rescue Plan Act of 2021 which included substantial funding for education. However, only 20% of those funds are required to be spent on recovering learning loss. Kane suggests districts spend more than 20% or perhaps all of their ARPA funds on learning loss recovery:

We try to put the scale of the [learning] losses and the amount of aid that districts have received in the same scale. We report both as a share of an annual school district budget, which I think is a useful starting point for thinking about what it’s going to cost a district to recover. If a district has lost the equivalent of, say, 22 weeks of instruction as a result of being remote, and you’re asking what it’s going to cost to make up for that, the lower bound of the estimated cost would have to start with [the question], “What does it cost to provide 22 weeks of instruction in a typical school year?”

We think that’s a useful starting point for people, and what they’d see is that in the high-poverty districts that were remote for more than half of 2021, the amount of aid they received is basically equivalent to — maybe a little more, but not much more than — the magnitude of their losses in terms of instructional weeks. That just means that, rather than spending the 20 percent minimum that was required in the American Rescue Plan, some districts should be thinking that they’ll need all of that aid for academic catch-up.

Imagine how much better off our society would be if politicians and school leaders truly committed to not only eliminating the pandemic learning loss, but using those interventions to insure every student is on grade level. How wonderful would that be?

Imagine how much better off our society would be if politicians and school leaders truly committed to not only eliminating the pandemic learning loss, but using those interventions to insure every student is on grade level. How wonderful would that be?

Additionally, empowering parents to choose a school that best fits their child, be it traditional public school, tuition-free charter school, private school, or homeschool, should also be a tool we deploy to help get kids caught up. 

Polling has made it clear that parents want learning loss recovery to be a high priority for their child’s school. In this election year, candidates and elected officials would be wise to make this an issue in their campaigns. Parents should demand this of their candidates, and then hold them accountable to eliminating learning loss for every student. 

Imagine how much better off our society would be if politicians and school leaders truly committed to not only eliminating the pandemic learning loss, but using those interventions to insure every student is on grade level. How wonderful would that be?

Education Promise Scholarships Should be a Winning Issue

Education Promise Scholarships Should be a Winning Issue

In The News

Education Promise Scholarships Should be a Winning Issue

The COVID-19 pandemic has been a watershed moment for expanding educational options for Georgia students. For many parents and families, the pandemic was the crisis point that showed them, in stark reality, the dire need for a full menu of educational options – whether that be a traditional public school, a public charter school, virtual educational programs or home education.

You don t have to look far to understand why. During the worst of the pandemic and resulting school closures, many familes were forced into alternative ways of schooling for tthe first time ever. Families’ experience with how traditional public schools handled the shift to distance learning were mixed and inconsistent. Some schools and teachers excelled, ensuring students did not lose out on learning. Others threw their hands up –and the towel in — early. Kids have suffered as a result. 

 

Local Nonprofit Breaking Down Barriers to Poverty | Peachtree Corners Magazine

Local Nonprofit Breaking Down Barriers to Poverty | Peachtree Corners Magazine

In The News

Local Nonprofit Breaking Down Barriers to Poverty | Peachtree Corners Magazine

With gas prices soaring and supply chain issues driving up consumer prices, it’s not hard to imagine more individuals are struggling to make ends meet. Complicate those issues with a lack of education, medical issues, trouble within the home or other barriers to success and you find some families hanging by a thread. Some find themselves homeless.

The Peachtree Corners-based Georgia Center for Opportunity (GCO) is working to break down those barriers to ensure everyone has access to a quality education, fulfilling work and a healthy family life.

 
WATCH: These powerful stories show why we need to share the Success Sequence each and every day

WATCH: These powerful stories show why we need to share the Success Sequence each and every day

man on top of mountain

WATCH: These powerful stories show why we need to share the Success Sequence each and every day

Key Points

  • All young people — not just those who come from rich families — deserve to know this “secret to success”: get an education, work hard, get married, and then have children.
  •  No matter the challenges young people face, there is a path to build a bright future — through the Success Sequence.
  • Institute for Family Studies has shared 3 powerful videos that show the face and opportunity brought by the Success Sequence.

The Success Sequence and its impact

“The choice of having children too early is one you’ll have to play catch up with for the rest of your life.” 

“I wish that I had made some different decisions when I was young. Think before you act. Definitely be intentional about the decisions you’re making at that age, because they do have a lasting effect on your life.”

 “Having to get food donated to us was the bottom of my life.”

Those are just a few of the powerful quotes contained in the narrative stories — called Straight Talk About the Success Sequence — in a series of new videos on the Success Sequence from the Institute for Family Studies.

The basic premise of this campaign is simple: All young people — not just those who come from rich families — deserve to know this “secret to success”: get an education, work hard, get married, and then have children.

As you know, the Success Sequence is a powerful and proven way for even the most disadvantaged men and women to avoid poverty and to have a shot at the stable, happy family life they really want.

 

The Success Sequence:
His Story

Part One: Men

The numbers prove it all

Statistics show that 97% of young people who follow these steps are not poor later in life, and fully 85% of them enter the middle class.

Can it really be that simple? That’s what’s so great about the Success Sequence: The answer is simple, but the key is to get the information to young people at the right time.

No matter the challenges young people face, there is a path to build a bright future — through the Success Sequence.

It’s organizations like the Georgia Center for Opportunity that are bringing the truth of the Success Sequence to young people every day. Whether it’s GCO’s work to expand educational options for all students, bring career opportunities to the impoverished, or bringing relationship enrichment classes to local communities, we are on the front lines. The Institute for Family Studies recognizes this.

The Success Sequence:
Her Story

Part Two: Women

“The Success Sequence is only effective as a concept if it’s shared in practical ways with young people,” said Brad Wilcox, senior fellow at the Institute for Family Studies. “On-the-ground organizations like the Georgia Center for Opportunity play a key role in this. Our young people deserve to know about their potential to take hold of the American Dream.”

Please share these important videos on social media, with your friends and family, and with young people in your life who need to hear this important message. We need to spread the word on the Success Sequence so that other young people don’t face the same struggles in life faced by Scott, Stephanie, and Caylie and Carlos.

The Success Sequence:
Their Story

Part Three: Cohabitation

The U.S. Department of Education has approved Georgia’s request to waive several testing and attendance measurements

The U.S. Department of Education has approved Georgia’s request to waive several testing and attendance measurements

girl remote learning

The U.S. Department of Education has approved Georgia’s request to waive several testing and attendance measurements

Key Points

  • Georgia’s request to waive several testing and attendance measurements for the 2022 school year was approved by U.S. Dept. of Education
  • This move locks in the learning loss that took place during the COVID-19
  • American Relief Package Act requires at least 20% of funds be spent on recovering learning loss

    Georgia’s request approved

    The U.S. Department of Education has approved Georgia’s request to waive several testing and attendance measurements for the 2022 school year. “Our goal is to establish a new baseline, rather than compare your schools’ performance to pre-pandemic norms,” said School Superintendent Richard Woods.

    Buzz - GA School quote

    The Georgia Center for Opportunity’s (GCO) take:

    “By doing this we are locking in the learning loss that took place during the COVID-19 pandemic,” said Buzz Brockway, vice president of GCO. “This means for some students, they will never recover from the pandemic learning loss they experienced, nor are they expected to recover. This ignores the millions and millions of dollars Georgia’s school districts are being sent via the American Relief Package Act, which requires that at least 20% of those funds be spent on recovering learning loss. What will local districts do with that money? Is giving up best for students? Georgia’s parents should march in loud protest to accepting that pandemic learning loss is the new norm.”