Build a Fairer Economy.

AuthorGoldstein, Alexis

The United States is now more unequal than ever. Our student debt crisis gets worse by the day, and 40 percent of Americans cannot afford an emergency expense of $400 or more. Meanwhile, the top 1 percent holds more wealth than the entire middle class.

This concentrated wealth leads to concentrated political power--for both individuals and industries. For this reason, making real gains toward a fairer economy will require bold steps.

Here is a step-by-step guide to making that happen.

Cancel student debt to boost the economy

U.S. residents are being crushed by student debt. Some forty-two million Americans owe a collective $1.6 trillion. An estimated 5.2 million of these borrowers are in default on their loans, with another borrower falling into default every twenty-eight seconds. This problem affects more than just the lives of the debtors: The New York Federal Reserve Bank has traced rising student debt to a decline in home ownership, which in turn has a negative impact on local economies.

We must provide direct relief from these increasingly unmanageable financial burdens. Our failure to do so is particularly cruel in the face of our society's promises and messaging on education. Higher education is held up as the pathway to a better life, but student debt is treated more harshly than most other kinds of consumer debt. You might be able to declare bankruptcy on your gambling debt, but you can't do so on your student loans--unless you meet a nearly impossible "undue hardship" standard.

Canceling student debt would provide real, immediate relief to millions. A study by Harvard Business School, Indiana University, and Georgia State University showed significant positive impacts on the lives of borrowers who had their debt canceled. They saw an increase in income and were able to lower their other (nonstudent loan) debts.

Moreover, a study by the Levy Economics Institute showed that student debt cancellation would provide a serious lift to the economy. It projects that in the decade following a wide-scale debt cancellation, the nation's gross domestic product could rise by up to $108 billion a year, and create up to 1.5 million jobs per year.

Currently, there are two promising proposals in Congress aimed at addressing student debt. One, by Senator Elizabeth Warren and Majority Whip James Clyburn, would cancel up to $50,000 in loans per borrower. The other, by Senator Bernie Sanders and Representatives Pramila Jayapal and Ilhan Omar, would...

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