Now that student debt is canceled, can we address its root causes?

President Joe Biden’s decision to cancel $10,000 in student debt for most borrowers and $20,000 for Pell Grant recipients was an unprecedented acknowledgment of today’s student debt crisis. For many, debt acts as an invasive weed choking off the benefits and opportunities that a college degree should bring. 

While the president’s plan has the potential to provide meaningful relief to millions of borrowers, the roots of the student debt crisis run deep, and only Congress can pull them up entirely.

After this relief is implemented, colleges will continue to raise tuition, low-quality institutions and programs will continue to receive billions in taxpayer funding without providing any real opportunity and students will continue to take out tens of thousands of dollars in loans — leaving the same challenges brought on by a lack of affordability and quality within the higher education system to grow again.  

Fortunately, Congress has the tools to address the root causes of this crisis by increasing grant aid, controlling the cost of higher education and holding institutions accountable for the opportunities they provide — or fail to provide — to students. 

For example, the federal government estimates that it will provide $85 billion in loans to students this fiscal year alone — more than grants and federally subsidized work opportunities combined. Moreover, loans account for approximately 67 percent of all federal student assistance. 

As the president noted in August, the Pell Grant previously covered 80 percent of the cost of a public four-year college but now only covers about 30 percent. Moreover, a recent government watchdog report outlined how the loan program is actually operating at a loss, costing the government $197 billion over a 25-year period. That’s money that could have been spent on grants or work-study opportunities. 

To prevent a future crisis, Congress must ensure that future grant and work-study funding outweigh funding for loans. 

Doubling funding for the Pell Grant would help restore the program’s power to improve social mobility. But increasing grant aid alone won’t prevent another crisis. Congress must also do the politically thornier but necessary work of controlling college costs, which requires confronting the considerable lobbying power of colleges and universities. 

The cost of college tuition has outpaced inflation for decades — increasing by 63 percent from 2006 to 2016 alone. During his debt cancellation announcement, President Biden once again noted the need for free or universal community college. Through a partnership with states — which would have to chip in — this proposal would bring down the cost of tuition for a college degree, or workforce-oriented credential, to $0 for many students and their families.

Congress could also require colleges and universities to pay into the financial aid system by providing an institutional match in funding for student loans or Pell Grants. This is not an entirely new concept; there are several examples of government programs that require institutions and grantees to provide a match in funding.  

Finally, Congress must meaningfully protect students and taxpayers from bad or outright fraudulent programs. One important step would be through strengthening the administration’s gainful employment rule, which is designed to deny funding to programs that don’t help students earn a reasonable living, and codifying it into federal law so that future administrations could not easily wipe it away. Congress can also provide targeted funding for the oversight and integrity of the student loan program and other federal financial aid programs like Pell and work-study, which the Department of Education could use to weed out bad actors within the higher education system. 

Congress must provide routine care and maintenance of the higher education system. It used to do this by updating or reauthorizing the Higher Education Act — the federal law that primarily governs the system. But the most recent reauthorization occurred in 2008 — back when the outstanding federal student loan balance was $577 billion, compared with more than $1.6 trillion today. There have been at least four reauthorization attempts since that time — two by Democrats, two by Republicans — but none were successful. But it may be that in order to prevent another student debt crisis, Congress must once again take on the daunting task of a comprehensive reauthorization.  

While President Biden’s debt cancellation plan will certainly cut down the weeds obscuring the path to the American dream and provide some needed relief to millions of students nationwide, it’s now up to Congress to prevent the next crisis by addressing the root causes of college cost and affordability. 

Jared Bass is the senior director for Higher Education at the Center for American Progress.

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