“American Requiem”: Student Loan Forgiveness and the Decline of Upward Mobility

By: Shavonne Hedgepeth 

Edited By: Lara N. Tomescu

Introduction

Beyoncé’s album Cowboy Carter, released in 2024, was born from an act of racial exclusion experienced while performing her song “Daddy’s Lessons” with The Chicks at the 2016 Country Music Awards (CMA). Following her performance, the backlash from several country music fans on social media was swift, culminating in the CMAs deleting all evidence of her performance from their platforms.¹ That moment led her to reclaim space in Country, a genre with deep roots in the Black American experience, one that has long evolved away from its origins. Similarly, the pursuit of literacy by newly freed Black Americans after the Emancipation Proclamation was an act of reclamation, an attempt to regain personhood after having been legally deemed three-fifths of a human being. However, as legal barriers fell, systemic ones remained. From redlining to segregated schools to the privatization of higher education, the road to equality has been littered with financial traps disguised as opportunity. In her song “Ya Ya,” Beyoncé asks, “Are you lookin’ for a new America?”² For the 42.7 million Americans burdened by $1.6 trillion in outstanding student loan debt, the answer is likely yes.³ With 5.3 million borrowers in default and the resumption of involuntary collections, many are grappling with the question of whether the American Dream has become too costly to pursue.⁴

Behind this crisis lies a moral philosophical question: should the primary access to knowledge and the means of self-improvement be commodified? As the Committee for the Nobel Prize in Economic Sciences recognized, the prosperity of nations depends not just on capital or labor, but on the quality of their institutions. Inclusive institutions, those that extend rights, protections, and opportunities, are the foundation of wealth. Extractive systems, by contrast, enrich elites while systematically excluding the majority.⁵ The American student loan apparatus mirrors this extractive design, distributing the cost of education onto individuals, particularly those from historically marginalized communities. Student loan forgiveness is a necessary response to a system that has prioritized financial gain over the pursuit of truth and democracy. Through empirical data and institutional critique, I contend that debt forgiveness is a moral imperative that aligns with the founding principles of justice, equality, and the pursuit of happiness.

The federal student loan system began with the Higher Education Act of 1965 (The Act), which sought to democratize education access in the wake of the Civil Rights Movement.⁶ At that time, public colleges were often low-cost or free, especially for white Americans.⁷ The Act was intended to eliminate barriers to education, but the decades since have seen skyrocketing tuition, stagnant wages, and deepening student reliance on loans.⁸  Programs like the Direct Loan Program and Income-Driven Repayment (IDR) plan have become the main mechanisms for financing higher education. The Public Service Loan Forgiveness (PSLF) program offers hope to some, but its implementation has been plagued by red tape and disqualifications.⁹ The GI Bill of 1944, which transformed the lives of millions of white veterans, systematically excluded Black servicemembers, particularly in the segregated South.¹⁰ As Cynthia Geppert notes, education once symbolized social mobility, but systemic racism in policy execution meant that Black Americans did not reap equal benefits. The modern student debt crisis continues this pattern: the cost of education has risen, but the support systems have not kept pace. First-generation and Black students are especially affected, as they are more likely to borrow and less likely to see proportional economic returns.¹¹ 

The structure of the federal student loan system continues to reproduce economic inequality, particularly for low-income and minority borrowers. Economist Adam Looney cautions that broad loan forgiveness, while politically appealing, is regressive because it directs the greatest benefits to borrowers with advanced degrees and high lifetime earnings. His analysis underscores that inequities in student debt stem less from repayment design and more from disparities in who can afford to attend college, the quality of institutions they can access, and how degrees are rewarded in the labor market. These underlying inequities, rather than loan balances alone, demand a policy response that is both intersectional and targeted. The wealth gap between Black and white households remains significant, and Black borrowers are more likely to default despite similar or smaller loan amounts.¹² Looney acknowledges that Black students, in comparison to their white peers, are less likely to attend high-quality institutions, complete degrees, or benefit equally in the labor market.¹³ Thus, any discussion of broad student loan forgiveness must consider the institutional factors affecting access, not just numbers on a balance sheet. The journey to meritocracy requires contextualization and nuance.

The 2024 Nobel Prize Committee in Economic Sciences highlighted how institutions, shaped by colonial and extractive legacies, dictate long-term prosperity. Just as inclusive institutions spur equitable growth, extractive educational financing has trapped millions in cycles of debt.¹⁴ The U.S. higher education financing model mirrors these extractive systems, providing opportunities but exacting a disproportionate toll on the least advantaged. From a labor economics standpoint, student debt alters career trajectories, delays homeownership, discourages entrepreneurship, and limits geographic and job mobility, which are accepted as key pathways to economic and social advancement.¹⁵ Since 2005, homeownership among recent college graduates has declined by 1.8 percent for every $1,000 of student loan debt. 51 percent of renters say student loan debt prohibits them from buying a home, and 29 percent of student loan holders say that debt has directly prevented them from becoming homeowners. Furthermore, 72 percent of student debt holders who do not own homes believe their debt will delay homeownership. Among those who do purchase homes, 37 percent of first-time buyers have student loan debt, and they spend an average of 39 percent less on their homes compared to buyers without student loans.¹⁴ Reducing or eliminating debt, particularly for lower-income borrowers, could unlock human capital by allowing individuals to invest in housing, entrepreneurship, and further education, activities that strengthen household stability and boost overall productivity. This relationship between debt, housing, and opportunity is critical: research from the Urban Institute emphasizes that housing stability, affordability, and neighborhood context play a significant role in upward mobility. When student borrowers are unable to build equity through homeownership, their ability to invest in communities, accumulate assets, and escape poverty is severely constrained.¹⁶

Engaging the Critics

Critics point to three (3) key concerns: moral hazard, inflationary pressure, and regressivity. Would forgiveness encourage future students to borrow recklessly? Not necessarily. The structure of income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) already incorporates conditionality and time-bound relief. With proper design and legislative clarity, forgiveness does not incentivize irresponsible borrowing. Second, inflationary concerns are often overstated; multiple studies suggest that student debt relief has only a modest short-term impact on inflation while producing long-term economic benefits through increased household spending and creditworthiness.¹⁷ Finally, the critique that broad student loan forgiveness is regressive must be contextualized. While higher earners hold more debt in absolute terms, lower-income and marginalized borrowers carry heavier relative burdens and experience greater economic strain. Thus, the regressivity argument, though valid in distributional terms, overlooks how structural inequities shape who borrows, under what conditions, and at what cost. A hybrid approach, combining targeted relief, expanded front-end aid, and institutional accountability, balances equity with fiscal responsibility.

President Biden’s SAVE plan and PSLF updates have attempted to address these challenges, but administrative complexity remains a major barrier. The National Association of Student Financial Aid Administrators (NASFAA) advocates for doubling the Pell Grant, converting it to mandatory funding, and simplifying FAFSA processes.¹⁸ These reforms are essential to ensuring that future cohorts do not face the same financial/economic burdens. Congress has not comprehensively reauthorized the Higher Education Act since 2008, leaving key provisions of federal student aid and accountability policy outdated. Legislative gridlock has prevented meaningful reform even as college costs and debt burdens have grown. The failure to comprehensively reauthorize the Higher Education Act since 2008 underscores the need for systemic policy overhaul. The SAVE plan’s pause following a February 2025 injunction reveals the political fragility of student debt relief. This paper maintains that relief should not be seen as a political favor but as a public good. A forward-looking policy framework would combine targeted forgiveness with expanded need-based support and tuition regulation.

Reclaiming Education as a Public Good

To avoid regressive outcomes while promoting equity, this paper proposes:

1. Targeted Forgiveness. Provide debt relief to low-income, first-generation, and public-sector workers to correct inequities in access and reward public service.
2. Automatic IDR Enrollment. Enroll all borrowers in income-driven repayment by default to prevent default and ensure payments reflect real income.
3. Double Pell Grants. Restore Pell’s value by doubling the award and indexing it to inflation so low-income students can afford college without heavy borrowing.
4. Tuition Regulation. Tie federal aid eligibility to tuition growth and student outcomes to hold institutions accountable for affordability.
5. For-Profit Oversight. Enforce stricter accountability for for-profit colleges with predatory practices to protect students and public funds.

Together, these reforms form a fiscally responsible, outcome-driven framework that restores fairness for borrowers, holds institutions accountable, and strengthens the American workforce. These policies are not radical; they reflect the original goals of the Higher Education Act and the spirit of the GI Bill. As economist Amartya Sen’s capabilities approach emphasizes, freedom is not merely the absence of constraint but the presence of real opportunity.¹⁹ The access to quality education in the United States functions as a core capability; it shapes who has the means to achieve upward mobility and who remains constrained by structural barriers.²⁰ More recent scholarship, such as legal theorist M. Mushfiqur Rahman’s critique of Nozick’s entitlement theory, underscores that justice must extend beyond formal ownership or merit to include equitable opportunity and rectification of systemic disadvantages.²¹ Despite scholarly debates, in American society, education remains a key capability. Debt that hinders family formation, homeownership, or civic participation is not just a financial burden; it is a structural obstacle to personal freedom. Economically, these recommendations promote efficiency by reducing labor market distortions and increasing human capital development. Philosophically, they affirm education as a right rather than a privilege.

The Department of Education could improve long-term outcomes by establishing a tuition-matching grant program, where states that invest in public higher education receive federal matching funds. This would incentivize more affordable public tuition while reducing institutional reliance on student loans. Concurrently, federal agencies could implement stricter accountability standards for institutions with high dropout rates or poor job placement outcomes. These standards should be based on tangible measures of equity, not just economic return. In addition, forgiveness frameworks should be built into degree completion milestones, particularly in under-resourced fields such as early childhood education, public health, and social work.

Such structures not only address workforce shortages but also align federal investment with national needs. Ultimately, any sustainable student loan reform must be holistic, integrating front-end investment, back-end relief, and mid-stream support into a cohesive and inclusive system of educational opportunity. The theoretical framework developed by Oded Galor and Joseph Zeira supports this view, showing that when education is costly and credit markets are imperfect, wealth distribution plays a central role in determining national productivity.²² In public institutions, underinvestment in human capital via low-wealth individuals leads to persistent inequality and lower aggregate output. Forgiveness can help correct this inefficiency by removing the barrier of debt-financed education, thereby expanding participation in higher-skill labor markets.

It is also important to note that when economic crises threaten corporate or financial stability, the federal government has consistently intervened. The 2008 bailouts, totaling $498 billion, or approximately $757.7 billion in 2025, were defended as necessary to mitigate systemic risk and preserve economic stability.²³ Yet individuals, especially those pursuing education to become productive members of society, are rarely afforded the same level of urgency. As the Congressional Budget Office notes, the costs of forgiving federal student loan debt depend heavily on program design. Still, even large-scale forgiveness would represent a relatively modest share of federal outlays compared to other fiscal interventions.²⁴ If banks are deemed “too big to fail,” then it is time we recognize that people are too valuable to neglect. Viewing individuals as economic assets worthy of investment reframes student loan forgiveness not as a handout, but as a stabilizing force that preserves our national economic health.

Between 2000 and 2020, the number of Americans with student loans doubled, and the amount owed quadrupled, growing faster than any other category of household debt.²⁵ The student loan crisis is more than an accounting problem; it is a moral reckoning. As philosopher John Rawls emphasized, a just society is one in which inequalities are arranged to benefit the least advantaged.²⁶ Building on this moral foundation, Rahman critiques Robert Nozick’s entitlement theory of justice, which holds that distributions of wealth are just so long as they arise from voluntary exchange and lawful acquisition, regardless of resulting inequality. This view, rooted in libertarian thought, assumes that markets operate on an equal footing, a premise that is challenged by persistent structural inequities in education and opportunity. Rahman’s analysis underscores that justice must extend beyond formal ownership or merit to include equitable opportunity and the rectification of systemic disadvantage.²⁷ Together, these theories illustrate the evolution of justice, from fairness in distribution to accountability for structures that shape who has access to opportunity in the first place. Properly targeted student loan forgiveness fulfills this distributive justice mandate. It is not simply an economic remedy but a reaffirmation that, in a democracy, opportunity should never be tethered to lifelong debt. Forgiveness, when structured equitably, is not merely a matter of balancing spreadsheets; it is a commitment to restoring education as a pathway to opportunity rather than a sentence to servitude. Critics are right to scrutinize the details but wrong to dismiss the need. The cost of continued inaction is greater: lost productivity, deferred dreams, and deepened inequality. Taken together, these economic and ethical arguments point to a singular conclusion: addressing the student debt crisis is not only fiscally prudent but morally necessary to restore fairness and trust in the nation’s social contract.

As Beyoncé asks: Are we ready for a new America? One that reclaims justice as boldly as she reclaims space in Black American patriotism. Just as Cowboy Carter reclaimed a genre that once excluded Black voices, student debt relief can reclaim education as a public good that truly serves all Americans. Student loan forgiveness is one way we can begin to answer ‘yes’ for all Americans impacted by student loan debt.

Works Cited

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Author Bio

Shavonne N. Hedgepeth is a dedicated advocate for equitable access to information and inclusive community building. Shavonne previously served on the board of a D.C.-based nonprofit mentoring young women and was a student advisory member for a Montgomery County Councilmember, addressing gaps in mental health services, infrastructure planning, and housing equity. She holds a master’s in library and information science from the University of Maryland, where she contributed to the Lost Towns Project, Maryland Historical Trust updates, and the Black Housing Project. She also served as a fellow at the National Agriculture Library and an advisory board member for the 1856 Project. Presently, she is on the board of JusticeAccess, a nonprofit mobile law library that aims to bridge critical gaps in legal information. She earned her undergraduate degree in History from the University of Maryland, Baltimore County, and will continue her valuable career in public service in capital planning at Washington Metropolitan Area Transit Authority. In her spare time, she enjoys adding to her constantly expanding book collection, listening to Beyoncé, traveling, and sustaining her shopping addiction.