Budgets and Values: How Republican Cuts to College Loan Forgiveness Will Harm the Working-Class

Tim Francisco Director, Center for Working-Class Studies

This summer, a Pew Research report attracted significant attention in media, policy, and academic circles because it revealed that for the first time, a majority of conservative Republicans believe college is hurting our country. The report reflects a political climate that is increasingly anti-intellectual and anti-institutional. While it may not be surprising, the poll suggests that college and class are becoming increasingly stratified and polarized in our national conversations and in public policy.

According to the study’s authors, “A majority of Republicans and Republican-leaning independents (58%) now say that colleges and universities have a negative effect on the country, up from 45% last year.” The number of Republicans without a college degree who believe universities help America dropped 20 percentage points in just the last two years. The decline for Republicans with a degree was 11 percent. That’s a point worth repeating: this dramatic decline occurred over a period of only two years – about the life cycle of the presidential primaries and campaign, and it appears among both college educated and non-college educated respondents. It is striking that this trend does not apply to Democrats, 72 % of whom say universities are good for the country.

This study has spawned many debates and analyses over what the findings mean. Is this a reaction to highly publicized free speech struggles on campuses that have become a staple of conservative media? Or is it due to presidential candidates’ escalating anti-intellectualism? Or does it stem from increasing college costs and debt with little certainty of economic return? I’d argue that all of these causes contribute.

A more important question is this: how might this pervasive Republican anti-higher education sentiment shape policy, and what consequences might this have for working-class college students and other vulnerable populations?

The budget proposals floated by the President and the House GOP suggest that Republicans are stoking anti-college sentiment to justify austerity. As Arne Duncan, Secretary of Education under President Obama, once said, “budgets reflect not just numbers but our values,” and although President Trump’s budget proposal, America First: A Budget Blueprint to Make America Great Again, is more ideological wish list than likely policy, it makes clear how he and Education Secretary Betsy DeVos conceptualize the role of public higher education. The House GOP’s plan for a Balanced Budget for A Stronger America similarly misses the complexities of the current institutional landscape. Taken together, these proposals amplify inequities of class already in play at America’s colleges and universities.

While the plans would cut different amounts from education programs, they converge around a market logic about the cause of rising student debt, which disproportionately affects low income students and students of color, the claim that colleges have raised their fees because there’s too much loan money available. The House report places blame on the government’s role in the student loan system: “As Washington has guaranteed students easy access to student aid dollars, which flow to colleges and universities, students have seen tuition and fees increase.” The claim is based  on The Bennett Hypothesis, which suggests that the more federal money available, the higher tuition will rise, actually freezing out the poorest students.

That hypothesis and the policy proposals it generates ignore the cuts to higher education by state legislatures across the nation, which have triggered tuition hikes and shifted the burden of college costs on to the students and their families.. This funding is slowly being replenished in some states, but still remains almost $10 billion below pre-recession levels.

Based on their claim that the availability of federal aid causes a tuition “bubble,” both the House and the President propose to  freeze the maximum Pell Grant, the award that subsidizes the poorest students, at its current level of $5,920. They would also cut $3.3 billion from the Pell Grant’s surplus, which is meant to cover future cost hikes. In addition, in the name of “streamlining” the student loan process and the “confusing” array of repayment options, the Trump proposal would eliminate subsidized Stafford loans, meaning students would have to pay interest on loans while still in school.

The Trump proposal is also especially hard on graduate students. Although the plan increases the percentage of income all student borrowers pay under Income Based Repayment Plans from 10 % to 12.5%, it decreases the years before the debt is forgiven for undergraduates from 20 to 15. It also increases the number of years to loan forgiveness for graduate students from 20 to 30 years.

Trump’s plan also eliminates the Public Service Loan Forgiveness Plan (PSLF). Established in 2007 by the Bush Administration, the PSLF allows college graduates who work for qualified nonprofit or government organizations to have their student loan balances forgiven after ten years or 120 consecutive payments. The program currently involves 553,000 people, and the first round of debt forgiveness is to begin this year.

While these proposals are deeply troubling as a whole for working-class and under-represented students, targeting graduate education for these students has some disturbing long-term implications, not only for these graduates but also for a wide swath of Americans disadvantaged by class, race, and gender.  Typically, PSLF borrowers work as lawyers, social workers, and teachers, employed at public institutions and non-profits. The program encourages public service by offsetting the often high-costs of specialized training to compensate for the often below average salaries in non-profits and government service. Despite the myth of the privileged public servant, public sector workers with master’s degrees earn 31% less and those with doctorates 21% less than their private sector counterparts.

In other words, PSLF encourages service-minded students to pursue professions that they might not have considered because of the debt they accumulate earning the degree. Some research suggests that the working-class students who would benefit from this might be even be more well suited that their more privileged peers to pursue public service, because that they value “interdependence,” prioritize giving back to their communities, and can act as role models for others.

By dismantling one mechanism for working-class students and students of color to enter public service, these proposals ensure that fewer professionals from diverse socio-economic backgrounds will be working on the ground and in the trenches to advocate for the needs and rights of traditionally marginalized populations. At a time when worker’s rights, minority rights, and equal opportunity are increasingly being challenged, we need professionals in law, public policy and social services who understand and can advocate diverse viewpoints.

It’s worth noting that the Pew study also shows that the more Republicans make, the less positive they are about higher education. Of those with salaries of $75,000 or more, only 31 % see college favorably, while 46% of those making less than $30,000 see college as positive for the country. In other words, mistrust of higher education is highest among people who wield the most economic and social power, many of them college educated themselves. Those who design and implement policies that undermine higher ed are also among our most highly educated: 66% of lawmakers have some type of graduate degree. Perhaps, as James Kwak has suggested, they are defunding higher ed in order to maintain their own socio-economic status.

Even if it isn’t about protecting the status quo, the proposed policies on higher ed, especially the Republican proposals to cut support to lower-income students pursuing public service, will do real harm to poor, working-class, and otherwise marginalized people – both those who want to go to college and those they might serve after graduation.

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Reposted from Working-Class Perspectives

Posted In: Allied Approaches, From Center for Working-Class Studies

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work