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Advances in Social Sciences Research Journal – Vol. 8, No. 10
Publication Date: October 25, 2021
DOI:10.14738/assrj.810.11091. Mbah, R. E. (2021). A Possibility or Just a Wish? Assessing Current Perceptions on the Potentials of a Full Student Loan Debt
Forgiveness Legislation. Advances in Social Sciences Research Journal, 8(10). 365-392.
Services for Science and Education – United Kingdom
A Possibility or Just a Wish? Assessing Current Perceptions on the
Potentials of a Full Student Loan Debt Forgiveness Legislation
Ruth Endam Mbah
Public Policy Department
Southern University and A & M College, Baton Rouge, LA, USA
Department of Business, Bethany College, Lindsborg, KS, USA.
ABSTRACT
Burdensome and unmanageable is what student loan repayment has become to
almost 45 million Americans who owe a total of about $1.7 trillion in student loans.
It is therefore intriguing to find out if a complete student loan debt forgiveness
miracle is a possibility or just a wish, based on current perceptions. This study is
based on the Three-Policy Window Stream Theory and the Interest Group Theory.
Four mini-focus interview groups were created and their responses were analyzed
using the Grounded-Theory Technique. From our findings, it is evident that student
loan debt affects the mass, forming a rapidly growing informal interest group made
up of mostly millennials. Yet, the pressure from this fast-growing informal interest
group is not strong enough to oppose that of other interest groups like Republicans,
taxpayers, financial institutions, and other stakeholders involved in student loans,
to necessitate an immediate passage of legislation on student loans debt
forgiveness.
Keywords: educational finance, student financial aid, student loan debt forgiveness, Four- Policy Window Stream Model, Three-Policy Window Stream Theory, Interest Group
Theory
INTRODUCTION
Statistics from the National Student Loan Data System (NSLDS) show that during the last 11
years, student loan debts (outstanding principal and interest balances of Direct Loans, Federal
Family Education Loans (FFEL), and Perkins Loans) have increased 2.8 times from 2007 ($516
billion) to 2018 ($1,439.2 billion). The figures have more than tripled as compared to previous
years and have become a dominant point of concern among students and policymakers in the
United States (Riegg & Rajeev, 2016). Ferretti, Jones, and Mcintosh (2015) argue that this rise
in student loan debt in recent years is due to the increase in the cost of college education, which
averages higher than the median family disposable income. In 1971, average college costs
(tuition, fees, housing, and board) at a four-year public university was $8,730 (in current
dollars), but today it has increased by 145% to $21,370, whereas the median household income
has only risen by 28% within the same time frame (Issa, 2019).
Current data on college pricing over the years from College Board (2018), a nonprofit
organization created to increase access to college education, indicates that tuition and fees (in
current dollars) have risen from $430 during the 1971-1972 academic year to $10,230 during
the 2018-2019 academic year at public-four year colleges. Consequently, Despard et al. (2016)
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and Dossani (2017) suggest that 70% of American postsecondary students borrow to finance
their education. To most college students, debt has become a ‘fact of life’ (Carrns, 2019) due to
the rise in the cost of college education to the point that some are opting not to attend higher
education (Britt et al., 2017; Kurfiss, 2020; Mbah et al., 2020; Pinto & Mansfield, 2006).
According to Amselem (2019), a policy analyst at the Heritage Foundation, ‘the cost of college
has skyrocketed, and students find themselves deeper in debt.’ Research indicates that repaying
this student loan debt is burdensome especially to students who do not complete their degree
and are thereby less likely to get jobs (see Liu, Li, & Rao, 2018; Perna et al., 2017 for more
details). Mueller and Yannelis (2019) argue that the swift increase in student loan default
sprang up after the Great Recession. In 2010, student loan debt ranked second among debts in
the U.S. after mortgage because it exceeded the total credit card debt outstanding for the very
first time (Avery & Turner, 2012; Despard et al., 2016; Luna-Torres et al., 2018; Friedman,
2018).
In recent days, almost one in every four student loan borrowers is either in delinquency or
default and about 90% of federal student loan borrowers have agreed to the government
proposal to halt their monthly repayments during the COVID-19 pandemic (Nova, 2021).
According to Student Loan Hero (2021), an organization in charge of helping over 200,000
student loan borrowers understand their debt and facilitate repayment decisions, about 44.7
million Americans owe over $1.7 trillion in student loan debt, which is almost $739 billion more
than the entire American credit card debt. The United States student loan debt “grows over six
times faster than the nation’s economy” and ‘the average public university student
borrows $30,030 to attain a bachelor’s degree’ (Bustamante, 2021). The average college
graduate completes with an outstanding debt of $30,000 as compared to $10,000 in the 1990s
(Nova, 2019). Meanwhile, recent statistics show that an average of $37,584 is owed by each of
the 44.7 million student loan borrowers; 42.3 million of whom are federal loan borrowers who
owe an average of $36,520 each in federal student loan debt and 2.4 million borrowers who
owe an average of $48,819 each in private student loan (Bustamante, 2021).
Unmanageable and burdensome is what student loan repayment has become to so me
Americans, specifically to students who do not complete college education and are less likely to
secure high paying jobs (Executive Office of the President, 2016; Liu, Li, & Rao, 2018; Perna et
al., 2017, Dossani, 2017; Barr et al., 2019; Looney & Yannelis, 2019). To emphasize, the
magnitude of the student loan problem in America, the Student Loan Hero (2021), reports, “It’s
2021, and Americans are more burdened by student loan debt than ever.”
From the above literature, it is evident that student loan debt is a problem affecting the United
States as a whole. However, in the past decade, most researchers have focused on student loan
debt as a challenge in American higher education, but very little research has been done on the
public policy perceptions of student loan debt and debt forgiveness. It remains unclear why
despite the wide impact of the student loan debt problem, a student loan forgiveness resolution
is yet to pass on as legislation. Thus, the purpose of this study is to examine the likelihood of
passing debt forgiveness legislation based on the political discourse given the number of
debtors (post-graduates in debt) in the voting population of the U.S. economy.
Thus, our research question is:
1) What is the likelihood of passing legislation for student loan/debt forgiveness?
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Mbah, R. E. (2021). A Possibility or Just a Wish? Assessing Current Perceptions on the Potentials of a Full Student Loan Debt Forgiveness Legislation.
Advances in Social Sciences Research Journal, 8(10). 365-392.
URL: http://dx.doi.org/10.14738/assrj.810.11091
The above question is relevant to current public policy discourse as several 2020 Democratic
presidential candidates during the democratic presidential race had written down detailed
plans on how to resolve student loan debt. Impressed by this, the president of the Institute for
College Access and Success, James Kvaal (Nova, 2019) said, “It’s striking how student debt has
become a top-tier issue in this presidential campaign.” This however is not surprising, as a
recent Politico/Morning Consult poll shows that more than two-thirds of voters think student
loan debt is a threat to the U.S. economy and 29% of such voters think it is a critical threat. This
poll also reveals that 67% of Americans have been deprived of major events like purchasing
either a car or a home because of their student loan debt, while 40% have delayed getting
married or having children (Wermund, 2019).
In recent times, the student loan debt forgiveness discourse has resurfaced among key
policymakers as the Senate’s top Democrat, Chuck Schumer of New York, along with Sen.
Elizabeth Warren, D-Mass’ and other Democrats have put forward a resolution requesting
President Joe Biden to forgive $50,000 in student debt for all borrowers, canceling all debts for
80% of federal student loan debtors (Nova, 2021; Richardson, 2021; Thrush, 2021). Thus, the
relevance of this study to public policy and student loan research. This study employs the three- policy window stream model on student loan forgiveness and the interest group theory. This
study adds to the limited research that exists on public policy perception of student loan debt.
This will help policymakers propose educational policies that will ameliorate and ease student
loan repayments. The new theoretical framework established in this study will equally set a
pace for future theories on student loan debt forgiveness.
The following sections of this paper present a review of related literature that emphasis on
student loan debt as a policy problem (section 2). Section 3 of this paper outlines the theoretical
framework of the study, which includes the Three-Policy Window Stream and the Interest
Group Theories. Section 4 describes our method based on Grounded Theory Analysis; a
technique used to evaluate qualitative data gotten from open-ended interviews. Section 5
embodies our results while section 6 provides a detailed discussion of our result and its
relationship to our theoretical framework. This, resulting in a new theory called The Four- Policy Window Stream, which combines the Three-Policy Window Stream and the Interest
Group Theories. The last section presents a conclusion, policy implications, recommendations,
and limitations of this study.
REVIEW OF RELATED LITERATURE
Nova (2021) argues that women owe about two-thirds of the nation’s outstanding student loan
debt as reported by the American Association of University Women. This report also suggests
that an average of $31,300 is owed by white female student loan borrowers while their male
counterparts owe $29,900. On the other hand, black female borrowers owe an average of
$37,600 while black men owe $35,700. She equally argues that, according to the Center for
Responsibility Lending, 85% of black bachelor’s degree graduates possess student loan debt as
opposed to their white counterparts (69%). Scott-Clayton (2018) argues that Black and African
American students default five times more than their white counterparts. A 2017 report from
the Board of Governors of the Federal Reserve System shows that Black Americans (20%) and
Hispanic (23%) student loan debtors are more likely to be behind in loan repayment than their
white (6%) counterparts. This report also suggests that more white borrowers (53%) complete
student loan repayment than Black (24%) and Hispanic (32%) borrowers. These figures imply
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that the burden of unmanageable student loan debt lies more on Black and Hispanic students
than on white students (Federal Reserve Board, 2017). This may be due to the racial and ethnic
disparity that exists in financial literacy, with African Americans and Hispanics having the
lowest level of financial knowledge in the U.S. due to the lack of the basic knowledge on financial
literacy concept among those who do not attend college education (Lusardi & Mitchell, 2014).
Fletcher and Fuller (2021) blame the disparity in student loan debt on the inequality that exists
in wealth building (barriers to wealth building). Kim (2019), a research manager at Heritage
Foundation suggests that according to recent surveys ‘only 57% of U.S. adults are financially
literate and that 76% of millennials lack basic financial knowledge, which is why they’ve racked
up $1 trillion in student debt.’
Cellini and Darolia (2016) studied the trend of college student borrowing and the financial
attitudes of undergraduate students across various sectors (for-profit, nonprofit, and public
sector) in the U.S. and over time. Their results show that the relatively elevated borrowing and
cost of attendance for for-profit postsecondary students were most alike to those of private
nonprofit postsecondary students. Whereas both sectors witnessed increases in tuition and
fees, the nonprofit sector alleviated their tuition burden by expanding the availability of
institutional grant aid, lessening the need for students to borrow more funds. Still, there was
no such swelling in institutional grant aid in for-profit institutions, and as a result, there existed
a positive correlation between student borrowing and tuition over the period observed.
Besides, observation shows that most students at the for-profit institutions came from low- income families with financial difficulties, despite the elevated cost of a for-profit college.
Luna-Torres et al. (2018) sought to comprehend the usage of loans and debt burden among
low-income and minority students from a large urban community college in Texas. Their
outcome shows that principally female students (68%), Black students (60%), students over
20 years of age, low-income students. and academically unprepared students (77%) take on
debt at the Metropolitan Community College in Texas. Additionally, findings show that
community college borrowers consist of students from the lowest income background
attending higher education. Hence, they suggest that helpful plans should be implemented to
help this vulnerable group of students acquire higher education to permit upward mobility in
the social class spectrum.
Kim (2019), a research manager at Heritage Foundation thinks that Sander’s $1.6 billion loan
forgiveness would rather increase the societal cost of education because records show that ‘for
every dollar of increase in federally subsidized student loans, tuition has increased by 63 cents.
According to Rhine (2019), a policy analyst at Cato Institute, both Sander and Warren's free
education proposed policies will be funded by taxpayers and this will not only include the rich
taxpayers because when ‘government gets involved, but all the risk also falls on taxpayers.’
Rugy (2012), a senior research fellow at Mercatus Center believes it is unfair to allow American
taxpayers, especially the present-day poor working class to “subsidize tomorrow’s big earners
while pricing themselves out of a better education.” Calton (2019), a research fellow at the
Mises Institute equally argues that increased government intervention in student loan
repayments does not only affect taxpayers but can lead to situations where “borrowers are
likely to take out larger and riskier loans, and creditors are unlikely to continue lending with
the looming possibility of politicians erasing their balance sheet.”
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Mbah, R. E. (2021). A Possibility or Just a Wish? Assessing Current Perceptions on the Potentials of a Full Student Loan Debt Forgiveness Legislation.
Advances in Social Sciences Research Journal, 8(10). 365-392.
URL: http://dx.doi.org/10.14738/assrj.810.11091
THEORETICAL FRAMEWORK OF THE STUDY
This study is established on the foundations of the three-policy window stream and the interest
groups theory. The three-policy window stream is also known as Kingdon’s three-stream
Policy Window Model or Kingdon’s Multiple Streams Approach after John Kingdon, who
believes that a problem or an issue can move into the government agenda and a solution be
selected from various alternative proposals when “elements of three “streams” come together”
(Birkland, 2016, p.372). For a specific issue to rise to the top of the government agenda and
subsequently be passed into law, a ‘policy window’ must open, and this window opens when
three streams (problem, policy, and politics) merge and the ‘time is ripe for legislation to pass’
(Cammisa & Manuel, 2014, p.119; Cammisa, 2018). These authors suggest that for any issue to
rise to the government’s agenda, both the government and the public must consider it a
problem (problem stream). That is, a public policy problem must be identified. These authors
argue that once the problem is identified, solutions to the problem (policies) are identified
(policy stream), and if the political environment is suitable, a policy will be selected from the
other proposed policies and legitimized via the legislative process (politics stream).
Cammisa and Manuel (2014, p.119) suggest that a policy window may be open for a short time
and there is no guarantee that a policy will be passed. According to these authors, this was the
case with the healthcare reform wherein the political window was open in 1993-1994 when
Bill Clinton became president but did not pass legislation. More so, the authors argue that once
a policy window is closed, it may take a very long time before it reopens as in the case of
healthcare, which had failed the political stream during Clinton’s presidency but reopened 20
years later in 2008 during the 2008 presidential campaign. Once the political window for
healthcare reopened in 2008, President Barack Obama used it as one of his major campaign
themes (fixing the broken healthcare), but this was not without tough challenges from Congress
and external nonlegislative constitutional actors like the Supreme Court and the state
(Cammisa & Manuel, 2014, p.118). Nevertheless, the Affordable Care Act was passed by
Congress, was signed by President Obama, and was deemed by the Supreme Court to be
constitutional and, as such, these authors acknowledged that “healthcare reform defied the
odds and illustrated that a majority faction can get something done under the American
Constitutional system of checks and balance” (Cammisa & Manuel, 2014, p.118).
Consistent with Cammisa and Manuel (2014); Cammisa (2018), it is evident that the student
loan issue has passed two policy window streams: Problem stream and Policy stream. However,
it still needs to pass the political stream. (1) The student loan issue has passed the Problem
Stream Window since it has been identified by the government and the public as a problem.
Politico/Morning Consult poll shows that more than two-thirds of voters think student loan
debt is a threat to the USA economy and 29% of such voters think it is a critical threat. This poll
reveals that 67% of Americans have been deprived of major events like purchasing either a car
or a home because of their student loan debt, while 40% have delayed getting married or having
children (Wermund, 2019). (2) Student loan problem has also passed the Policy Stream
Window since several congressional policy proposals have been submitted, like the recent
resolution submitted by Senate’s top Democrat, Chuck Schumer, Sen. Elizabeth Warren, D- Mass’ and other Democrats. However, the student loan repayment problem is yet to pass the
politics stream even though it affects most ofthe millennials who form a large, growing informal
interest group according to our findings from several articles and think tanks. Data from the
Pew Research Center shows that most Americans within the voting age group have outstanding
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student loan debt: 34% are aged 18-29; 22% are aged 30-44; 7% are aged 45-59 and 1% are
60+ (Cilluffo, 2019).
According to Birkland (2016, p.55), interest groups are ‘key actors in the public policy
process.’ Birkland (2016, p.158) defines interest groups as “a collection of people or
organizations that unite to advance their desired political outcomes in government and
society.” The author equally argues that interest groups are significant in the policy process
because the power of individual voices is even stronger when they form groups. Interest groups
have become popular since they have “proven to be an effective way for many people to
collectively express their policy desires” (Birkland, 2016, p.108). Berry and Wilcox (2018, p. 5)
define interest groups as “an organization that tries to influence government... Interest groups
are organizations that are not part of the government they are trying to influence.” Interest
groups could be classified in various manners: institutional interest groups, which are informal
organizations within an institution or organization; economic interest groups, which protect
the economic interests of members; and public interest groups, which promote what members
perceive as ‘broader public interest’ (Birkland, 2016, p. 160-161).
Some of these interest groups have more power than others. Those groups with more
influential and privileged interests are called ‘special interest groups.’ Such groups are the
reason why Americans are suspicious of interest groups, but those groups whose mission is to
counteract those of the ‘special interest groups’ are called ‘public interest groups’ (Birkland,
2016, p. 158-159). Factors that enhance this variation in power among different interest groups
include money, knowledge, information, the size of the groups, and their resources (Birkland,
2016, p. 159). When interest groups use their powers to influence policymakers, it is called
‘lobbying’ and this could be directly or indirectly towards either the legislative, judicial, or
executive branch of government (Berry & Wilcox, 2018, p. 7). Thus, with the increase in the
number of millennials (44.7million) saddled with student loan debt, we seek to find out if the
power of this interest group based on their number can push the student loan debt forgiveness
forth as legislation. Demographic statistics show that 56% of the voting population with
outstanding student loans are between the ages of 18-44 years. Extending to 59; that is, 18-59
years: 63% of the voting population have outstanding student loan debt (Wermund, 2019).
METHODOLOGY
Instrument/Sample Size
The research instrument employed in this study was a focus group interview. Krueger and
Casey (2009) define a focus group as “a carefully planned series of discussions designed to
obtain perceptions on a defined area of interest in a permissive, non-threatening environment.”
The choice of a focus over the other research instrument is due to its five distinct features: 1) it
is composed of people; 2) it is made up of group members that are related to one another in a
manner that is vital to the researcher; 3) provides qualitative data; 4) it has a ‘focused’
discussion and 5) it facilitates the comprehension of the topic of interest (Krueger & Casey,
2009).
For this study, a total of four (04) mini-focus interview groups (Greenbaum, 1998) were
created, constituting six (8) participants each. These participants constitute graduates from
various colleges/universities across the United States of America who completed college with
student loan debt and currently work for Southern University and A & M College (SUBR).