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Reframing student debt cancellation as a racial justice issue
Researchers from the Institute for Economic and Racial Equity conducted the analysis backing progressives’ efforts to cancel $50,000 in student loan debt
By Bethany Romano, MBA’17
Twenty years after starting college, white borrowers’ median student debt fell to 6%, whereas the median Black borrower still owed 95% of their loan. With student loans in the U.S. totaling $1.5 trillion, this mounting crisis became a key issue in the 2020 presidential election and remains a heated debate in Washington.
Legislators in both houses of Congress have introduced resolutions calling for federal student loan cancellation, as have city governments in Boston, Washington, D.C., and elsewhere. Within two years, the U.S. went from considering student debt cancellation a pipe dream to arguing over how much to cancel.
Among the leading voices on this issue is Sen. Elizabeth Warren, who famously presented a student loan cancellation plan during her presidential bid. That plan — to cancel $50,000 in student debt for 42 million Americans while simultaneously shrinking the racial wealth gap — was built on decades of research spearheaded by Thomas Shapiro and colleagues at the Institute for Economic and Racial Equity (IERE).
Building the Literature on Racial Wealth Inequality Shapiro, the Heller School’s Pokross Professor of Law and Social Policy, has researched racial wealth inequality with colleagues at the Institute for Economic and Racial Equity (formerly the Institute on Assets and Social Policy) for over 15 years.
“Wealth allows families to weather emergencies, and invest in a home, a college degree or a business. Without wealth, families and communities cannot be financially secure,” says Shapiro. The wealth gap between Black, Latinx and white families is not only massive — it’s growing at a breakneck speed. Tracking the same families over time, between 1984 and 2007, the wealth gap between white and Black families more than quadrupled from $20,000 to $95,000.
But the racial wealth gap is not just a manifestation of past injustice: Present-day policies are making it worse. Over the years, Shapiro and IERE colleagues have examined how homeownership, occupational segregation, tax policy, family inheritance and student debt contribute to the gap.
“Well-meaning foundations, politicians and educational experts started pushing students to take loans, since they are low interest and mostly held by the Department of Education,” says Shapiro. “Now the total value of student loan debt in the U.S. exceeds all credit card debt. That was a wake-up call.”
He and others started to ask: Who was holding all that student debt? In 2019, Shapiro and his IERE colleagues Laura Sullivan, PhD’13, Tatjana Meschede and Fernanda Escobar, MPP’15, released a landmark report titled “Stalling Dreams: How Student Debt Is Disrupting Life Chances and Widening the Racial Wealth Gap.” In it, the authors outlined a system in which Black and Latinx students are more likely to take out loans for college, borrow more money than white students and default on their loans.
“As somebody who has looked at racial wealth inequality for a long time, I didn’t have to think long and hard about why that would be the case,” Shapiro says. “African American and Latinx student borrowers finish higher education at a lower rate and come out with higher debt. So they pay more for college and get less out of it.”
Perhaps most alarming, the report showed that 20 years after starting college, white borrowers’ median student debt fell to 6%, whereas the median Black borrower still owed 95% of their student loan.
“One’s ability to pay back a loan is complicated. It has to do with the amount of loan in the first instance, the quality of your degree, the job you get, as well as who else in your family or kinship network you’re supporting, and any inheritance you can use to pay it back,” Shapiro says.
Elizabeth Warren Wants a Plan for That In the spring of 2019, with over a dozen Democratic candidates in the primary, Warren decided her platform needed a policy solution to the student debt crisis. Her staff reached out to Shapiro to ask if he would help with the analysis.
“The senator wanted a plan that would cancel the most debt for the most people, regardless of degree or whether they graduated. And it needed to be relatively simple: She had to be able to explain it in a short paragraph while standing onstage before an audience,” he says.
Shapiro was interested, and he wanted to include a racial wealth inequality filter in the analysis. Warren’s group agreed. He pulled together a team of volunteers, including Sullivan (now director of the Economic Justice Program at the New Jersey Institute for Social Justice), Louise Seamster from the University of Iowa and Raphaël CharronChénier from Arizona State University.
“It’s an interesting policy puzzle,” says Seamster. “The student debt crisis is both created by and magnifying the racial wealth gap, and it can have complex effects. Some amount of cancellation can increase Black wealth significantly, but at some level it starts to benefit wealthy white people most of all, which exacerbates the racial wealth gap.”
Together, the team landed on a proposal to cancel $50,000 in student debt, with eligibility phased out for people who earn over $100,000. In their model, over 95% of borrowers would receive some cancellation, more than 76% would have their entire loan wiped out, and the racial wealth gap would shrink slightly for both Black and Latinx households.
Warren announced her student debt cancellation plan based on the research team’s work, and it quickly entered the political zeitgeist. “It broke through the national discourse on student debt, while making sure that race was absolutely a part of that conversation,” says Shapiro.
Unlike competing plans, Warren’s proposal contextualized student debt cancellation in terms of racial justice, noting that “the burdens of student debt are not distributed equally across all Americans: Our country’s student debt crisis
is hitting Black and Latinx communities especially hard.”
IERE Associate Director Tatjana Meschede says, “This careful analysis found that $50,000 of student debt cancellation has the highest impact of reducing racial wealth disparities, an important marker of success; $50,000 has been circulated in many policy conversations since.”
It’s Not Whether — It’s How Much In December 2020, Warren co-wrote an op-ed with Senate Majority Leader Chuck Schumer calling again for $50,000 in debt cancellation rather than the $10,000 President Biden pledged during his campaign. In early 2021, Warren, Schumer and others introduced House and Senate resolutions to the same effect. These items directly reference the background analysis by Shapiro, Seamster, Sullivan and Charron-Chénier.
The issue seems unlikely to fade. Seamster notes that Warren’s proposal reshaped the public conversation drastically, “to the point that we’re now debating how much debt should be cancelled.”
Observes IERE Director Maria Madison, “IERE’s research team helps explain racism’s impact on generations of Black and white college graduates, much like Heather McGhee’s metaphor of ‘the drained pool’ described in her book ‘The Sum of Us,’” referencing towns that chose to close community pools rather than integrate them in the 1960s. Student debt cancellation offers an opportunity to reframe the conversation around the racial wealth gap from a zero-sum game in which one group’s gain is another’s loss, to one where a rising tide lifts all boats — building equity in the process.
“You can’t talk about student debt without understanding why it’s there, why it impacts some groups more than others,” says Shapiro. “I was really pleased with our work on Warren’s plan.
“Now it all depends on where the politics land.”
The conference that continues to shape U.S. health policy
For nearly three decades, Stuart Altman has chaired the Princeton Conference, an annual meeting of the nation’s biggest figures in health policy
By Bethany Romano, MBA’17
Many of the most transformational health policy ideas of the last quarter century originated from a small annual gathering with a big reputation and a simple name that belies its importance: “The Princeton Conference.”
Out of the Princeton Conference have emerged key provisions of President Joe Biden’s American Rescue Plan and major unveilings of new health care payment and delivery models — all with the goal of making U.S. health care more accessible and efficient.
That’s thanks to the leadership of Stuart Altman, Heller’s Sol C. Chaikin Professor of National Health Policy, who has advised five U.S. presidents and long been regarded as one of the country’s top health policy experts. He designed a conference that brings together the nation’s top academics and analysts to sit shoulder to shoulder with industry leaders and state and federal policy staffers from both sides of the aisle.
“Real solutions to the biggest problems in health policy today” Twenty-eight years ago, Princeton Professor Uwe Reinhardt convened a group of leading health economists to provide expert analysis on President Bill Clinton’s health reform plan. Reinhardt’s funder, the Robert Wood Johnson Foundation (RWJF), saw potential in regular gatherings of health policy experts and decided to fund the creation of an annual Princeton Conference.
RWJF turned the endeavor over to Altman, and offered its headquarters in Princeton, New Jersey, as a meeting site. For the last 26 years, Altman says, “The Princeton Conference has invited the leading health policy analysts in the country, over a three-day period, to discuss the major issues of the day.”
The Princeton Conference differs from a traditional conference because it’s invitation-only and is limited to about 140 people. It’s also not a forprofit event; attendees cover their travel expenses and lodgings, but there’s no registration fee or hall of sponsor-vendors to wade through on the way to the coffee station. Altman raises more than $250,000 each year from over 30 organizations to keep it that way.
The invitees — a diverse group of the nation’s top health policy minds — are hand-selected by Altman and his advisory board. “It’s both a core component of senior people who have been coming for many years, and a growing group of younger people who are making a name for themselves,” says Altman.
“It’s a who’s who of health economists and health policymakers,” adds Associate Professor Michael Doonan, PhD’02, conference director. “Some conferences only focus on the research. This brings research and policy together, with people who really do the work.” The virtual 2020 conference included presentations from Surgeon General Vivek Murthy and Wendell Primus, House Speaker Nancy Pelosi’s top health policy adviser.
Beyond big names and top organizations, the Princeton Conference is “limited to those who are truly dedicated to making a positive impact in the American health care system,” says Sarah Emond, MPP’09, executive VP and COO of the Institute for Clinical and Economic Review.
Emond received an invitation shortly after graduating from the Heller School. “Stuart and Mike make sure the next generation of policy thinkers are there. At first I was just listening, and realizing I was listening to someone I’d read six papers by in graduate school.”
Altman and his advisory board also strive to ensure that the group is meaningfully diverse both demographically and politically, taking great care to ensure strong representation from both sides of the aisle and multiple sectors of the health world.
“I love the bipartisan nature of the conference,” says Emond. “There’s lots of respectful disagree-
Sarah Emond, MPP’09 ment in the room. I think it’s one of the last places we can have honest conversations about real solutions to the biggest problems in health policy today.”
The “Meet the Press” of conferences “The things that get discussed and the connections that get made at the Princeton Conference can change where the nation goes,” says Karen Feinstein, PhD’83, president and CEO of the Jewish Healthcare Foundation. “I know that sounds like an exaggeration, but at some level, I believe in that.”
It was at a Princeton Conference that Dr. Mark McClellan, former head of the Centers for Medicare and Medicaid Services and the Food and Drug Administration under President George W. Bush, first introduced the concept of Accountable Care Organizations. The new health care payment and delivery model has since grown rapidly in popularity.
“It’s the ‘Meet the Press’ of conferences,” says Chris Jennings, a former senior adviser to presidents Clinton and Obama. He adds that the conference always features experts who are respected across the political spectrum to discuss issues that are timely and relevant to the moment.
Past debates have included the possibility of a physician shortage in the U.S., and efforts to contain rising health care costs in Massachusetts compared to other states. The group has analyzed Medicare payment models and completely reimagined the Medicaid program for a possible future where managed care is the norm.
One recent conference focused heavily on shortfalls of the Affordable Care Act, including the lack of affordability of private insurance in state marketplaces. That debate formed the basis for some of the provisions in President Biden’s American Rescue Plan, which reduces health care costs and expands access to insurance coverage for low-income people.
“In recent years we’ve focused more on the social determinants of health and the importance of non-clinical care to improve population health,” says Altman. “We’ve also emphasized the problems of our mental health delivery system, including how we finance it and whether the U.S. has adequate mental health personnel. It’s evolved over time.”
The intimate format and insistence on audience involvement are hallmarks of the event, which eschews the traditional “sage on the stage” culture of other conferences. President and CEO of the Blue Cross Blue Shield of Massachusetts Foundation Audrey Shelto, MMHS’82, says the incredibly robust discussions “make for tremendous learning in all directions … Stuart and Mike often have trouble getting everyone back into the room!”
Some poke fun at the “mutually inconvenient” location in Princeton, but for Altman, it was a conscious decision to keep the conference out of Washington, D.C., or another large city. “I wanted to get them away from their desks, and to do this over several days,” he says. “It allows for a lot of interchange among the participants. It’s more designed to be like a retreat that way.” Inspired and empowered to do better Attendees regularly note how much they look forward to the Princeton Conference, with Emond calling it “the highlight of my year.” In addition to the unique format, high-value networking opportunities and unparalleled presentations and debates, it is clear that Altman’s leadership is key to the continued enthusiasm of the attendees.
“He’s the center of energy that ties it all together — his tremendous knowledge, credibility and the affection that the health policy community has for him,” says Chip Kahn, president and CEO of the Federation of American Hospitals.
With 28 conferences in the books, Altman and the rest of the conference team and advisory board are planning a return to in-person events in 2022. After two years of the COVID-19 pandemic and with midterm elections on the horizon, there will be no shortage of critical health policy topics to address.
For those dedicated to improving the U.S. health care system, the Princeton Conference remains an essential space for fostering positive change. As Jennings puts it, “People walk out the door informed and inspired and empowered to do better, wherever they are. That is the magic potion of the conference.”
Safeguarding refugee health in a global pandemic
Diana Bowser and Donald Shepard examine the impact of COVID-19 on Venezuelan migrants living in Colombia
By Karen Shih
For Venezuelan refugees seeking to escape the economic meltdown in their home country, the arrival of a global pandemic was yet another major hurdle in their quest for safety and stability. Most countries focus on their own citizens in times of crisis, leaving vulnerable migrant populations behind.
“This pandemic has exposed many of the inequities in our society in general, and especially for the health care system,” says Associate Professor Diana Bowser. “Low-income, immigrant and refugee populations that don’t have access to health care are most vulnerable in a pandemic.”
Luckily for the 1.8 million Venezuelans who have settled in neighboring Colombia, the Colombian government’s more inclusive approach has likely saved lives.
“Under the Colombian constitution, any resident is entitled to health care. There are levels, but at a minimum, every resident — including Venezuelans — can access basic care for emergencies,” says Professor Donald Shepard, though they have less access to health insurance and comprehensive care.
In a new study, Bowser and Shepard, of the Institute for Global Health and Development, collaborated with Arturo Harker Roa, of Colombia’s Universidad de los Andes, and others, to examine the impact of COVID-19 on Venezuelan migrants living in Colombia. From spring to fall of 2020, they focused on the use of health care services as well as adherence to public health guidelines, such as wearing masks and staying at home. The study was funded by the nonprofit organization Elrha, which seeks to solve global humanitarian problems.
The researchers took a three-pronged approach. In one report, they used a national Colombian health database to compare Venezuelans’ and Colombians’ utilization of health services. In another, they examined self-reported COVID-19 symptoms and adherence to masking and socialdistancing measures via telephone surveys. A third delved into people’s movement and its impact on COVID-19 cases by using anonymous cellphone data.
“In any migration crisis, there are a lot of assumptions made by policymakers and the host population about the behaviors of refugees,” says Harker Roa. “But our findings can provide evidence and inform policymakers as they decide on strategies for promoting access to health services for refugees in Colombia.”
A key finding of the health services utilization paper, led by Shepard, was that Colombians had 10 times the rate of reported COVID-19 cases compared to Venezuelans — contrary to the researchers’ expectations.
“Venezuelans tend to be poorer and often work in manual labor or delivery jobs rather than whitecollar jobs that allow them to work from home, so we expected their case rates to be higher,” Shepard says. However, official COVID-19 case numbers rely on positive tests, and since testing was largely limited to those with better access to health insurance — Colombians — the data were likely skewed.
“It reminds us that in many parts of the world, the officially reported cases are just the tip of the iceberg,” Shepard says.
For hospitalizations, Venezuelans had almost the same rate as Colombians, indicating that patients with the most serious health needs were able to receive care.
“It’s impressive,” says Shepard. “It’s one thing for a policy to exist on paper, but these numbers show what was happening in reality.”
Bowser led the telephone survey of more than 8,000 Venezuelans and Colombians across 60 municipalities. She found that both groups were highly influenced by community members on
behaviors like wearing masks, social distancing and signing up for COVID-19 testing.
The findings indicate that the public discourse about individual decision making in a pandemic is less important than the actions of a community. “In reality, we do what people around us do. If communities are doing the right thing, people will do the right thing,” Bowser says.
One surprising finding was that Venezuelans were just as compliant with public health measures as Colombians, which was contrary to the researchers’ hypothesis. They had initially thought that lack of information and lack of hand sanitizer or soap and water, as well as more crowded living and working conditions, would keep the Venezuelans from being able to follow the guidelines. But since Venezuelans and Colombians share a common language, Spanish, and the Colombian government actively promoted the guidelines within migrant communities, both populations were able to follow important public health measures.
The third part of the study was led by Jamie Jason ’20, MS’21, then an MS in Global Health Policy and Management student, who examined daily aggregate mobility data from cellphone companies, provided by the United Nations Development Program, to determine correlation with COVID-19 cases and deaths. These data grouped Colombians and Venezuelans together.
Weekend activities turned out to be an important indicator for COVID-19 cases. Cities with specifically less weekend mobility enjoyed six times the reduction in COVID-19 cases compared to cities with just general reductions.
That’s because when people leave the house on weekdays, they’re often going to work or shopping for essentials in more structured environments conducive to masking and social distancing. However, people engage in riskier behaviors on weekends during social activities, with bigger gatherings and lower compliance with public health guidelines. “Since COVID-19 can spread quickly during crowded indoor gatherings, it’s important for governments to enact stay-at-home measures and isolation policies during weekends to reduce the impact of riskier weekend behavior,” says Jason. He was one of several student researchers on the project, including PhD candidate Priya Agarwal-Harding, Anna Sombrio, MS’20, and several students in Colombia.
Now, the researchers hope local policymakers can use their data and findings to more effectively reach vulnerable populations, especially as the vaccine is being rolled out.
“Experts in political science and economics will be eager to use our data to analyze and understand what’s happening across the country,” says Harker Roa. “We have a track record of evidence-based policymaking in Colombia, so this study has a good chance of being heard by policymakers.”
A new step taken by the Colombian government in February 2021, after the conclusion of the study, makes its health care system even more inclusive. Around 1 million Venezuelans are now eligible to officially register with the government under a new authorization that allows them to sign up for insurance and access higher tiers of health care.
Harker Roa says it’s a step in the right direction, and “a very progressive policy. But the financial risk of the system is really high.”
For Bowser, who has dedicated her career to finding the most vulnerable populations and making sure they have the best services available, there’s room for optimism.
“It’s hard for governments, because opening health care services is an expensive budgetary issue,” she says. “But you’ll see in the case of Colombia, expanding services to some of the vulnerable patients may save them money in the end, with fewer people getting sick and coming in for emergency services. It makes sense long term.”
in the news
In April 2021, Bowser, Shepard and Harker Roa joined colleagues in a commentary piece in Nature Medicine, “Leave No One Behind: Ensuring Access to COVID-19 Vaccines for Refugee and Displaced Populations,” arguing that giving COVID-19 vaccines to refugee and displaced populations and addressing health inequities are vital for an effective pandemic response.
