Guest Commentary: Student debt forgiveness accelerates Delaware efforts


Dr. Tony Allen is the president of Delaware State University, the chairman of President Joe Biden’s Board of Advisors on HBCUs and a member of the Economic and Community Advisory Council of the Federal Reserve Bank of Philadelphia.

Delaware is often the exception to the rule, and in terms of higher education, that’s great news.

While announcing the cancellation of $10,000-$20,000 in federal student loan debt for 43 million Americans, President Joe Biden noted that a major driver in rising college costs and student debt has been the decline in state support of public universities and colleges. He’s right: Since 2001, state support nationwide for higher education has declined by nearly 15%.

Fortunately, that’s not the case in Delaware.

Budget appropriations for the University of Delaware, Delaware State University and Delaware Technical Community College did decline immediately after the 2008 financial crisis, but thanks to consistent, bipartisan efforts since then, Delaware has remained among the top tier of student support in the nation.

Among 30 states offering free or significantly reduced tuition for two-year or four-year degrees, Delaware’s Student Excellence Equals Degree and Inspire Scholarship programs consistently rate at the top in a CNBC category, “Statewide free college tuition program enacted with few eligibility limits.”

For thousands of Delaware families, this has meant that their children could attain a high-quality, low-cost college education, often without having to leave home.

Delaware’s college completion rate is 11.5% higher than the national average, which is our pipeline producing teachers, nurses, social workers, scientists, law enforcement officers and many other young professionals.

Yet 71% of our college graduates go elsewhere to find their first jobs.

The Delaware State Chamber of Commerce and Metropolitan Wilmington Urban League are leaders in addressing this concern with their innovative Intern Delaware initiative, Delaware Young Professionals Network and the Metropolitan Wilmington Urban League Young Professionals. While those efforts help, student loan debt continues to drive recent graduates out of state. Our graduates average $38,871 in federal student loan debt, making their individual debt load the eighth highest in the nation.

If we’ve done so much to reduce or eliminate tuition costs, how can student debt be so high?

It’s a great question.

First, using averages can be deceptive. Students of color and other students from low-resource families typically incur far higher student loan debt than their peers, due to challenges in meeting the other costs of residency fees, food, textbooks and transportation.

Without programs like SEED and Inspire, however, many of these young women and men from low-resource families could not have aspired to a college degree at all.

Moreover, despite 12 different state-sponsored financial aid programs to reduce or eliminate student debt, graduates making loan payments of $300-plus/month need to pursue the highest-paying positions they can find, even if that means leaving home. If they stay current with repayment, their debt-to-income ratio often so negatively impacts their credit scores that they cannot qualify for a home loan.

Loan cancellation directly attacks these problems, while overhauling the income-driven repayment option, potentially reducing monthly payments by up to 80% for graduates with a family of four and an annual income of $77,000. About 1.1 million recent graduates of historically Black colleges and universities across the nation will receive $15 billion in debt relief.

Is $10,000-$20,000 debt elimination sufficient to have a transformative impact?

In South Carolina, this program will completely eliminate the total student loan debt of 28% of the borrowers and up to half for twice that many people. Translated to Delaware this equates to 36,000 of our neighbors getting complete relief and another 70,000 enjoying significant reductions.

For graduates preferring to stay in Delaware this will be game-changing but will it fuel inflation or increase the deficit?

Last year, the administration reported achieving a history-making $350 billion in deficit reduction and is projected to achieve an additional $1.7 trillion reduction this year. Additionally, Forbes reports that Goldman Sachs and Bank of America both concluded that, with respect to inflation, the Biden plan “likely won’t hike up prices — and could actually help cool them slightly.”

Delaware is blessed with three outstanding public institutions of higher education that our high school graduates can access with little or no tuition. All are committed to research and outreach that dramatically impacts quality of life across the nation, in partnership with government, corporate and nonprofit funders.

Consider energy research. DelTech is one of only five community colleges nationwide participating in the National Science Foundation’s $7.5 million CREATE Energy Center, expected to become “the preeminent source of faculty professional development and instructional materials for energy educators.” Delaware State University’s Renewable Energy Education Center is powered by Exelon and Delmarva Power, while Sandia National Lab and the Laboratory for Laser Energetics are sponsoring the University of Delaware’s research into nuclear fusion.

Few states boast a public system of higher education providing a better value or that consistently punches above its weight class in research, outreach and collaborative partnerships.

I’d especially remind parents of Delaware State University’s newest freshmen that they’ve chosen wisely. Between the four-year, full-tuition Inspire Scholarship, the digital learning initiative providing them each with an iPad or MacBook to reduce textbook costs and raising tens of millions in new scholarship support, you’ve invested in one the best returns on investment in higher education in America.

The Biden administration’s bold move is a grand accelerator to our efforts.

Editor’s note: Delaware State University president Dr. Tony Allen takes a deeper dive into details of the Biden-Harris Administration Student Debt Relief Plan here.

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