If debt relief overall would disproportionately flow to better-off Americans, even modest debt forgiveness would help many financially vulnerable people, especially people of color. College dropouts, especially those who attended for-profit schools, often end up trapped by debt they cannot afford to repay. “In this moment of national reckoning on racial injustice, the president-elect must cancel all federal student debt on Day 1 of his administration,” Representative Ayanna Pressley, Democrat of Massachusetts, said in a statement. The total percentage of Black households that would benefit would be greater than white households, and the relative gains for those households’ net worth are far larger, the researchers found. The greatest marginal gains come from canceling the smallest debts; wiping out $20,000 would end student debt for half of all households with loans.

Source: New York Times December 10, 2020 22:06 UTC