Hillary Clinton has a new student debt forgiveness plan. But who will really benefit?

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Hillary Clinton's campaign announced a plan on Tuesday to encourage entrepreneurship among young people while also easing the burden of student debt.


Since she clinched the Democratic presidential nomination in early June, Clinton's campaign has been trying harder to reach young voters, who turned out overwhelmingly for Bernie Sanders in the primaries. And addressing the intersection of student debt and small business seems like a smart policy move since two recent Fusion polls suggest that a lot of young people with student debt also see owning their own business as a major part of the American Dream.

Clinton's plan would allow people starting businesses to defer payment on their federal student loans for up to three years—zero interest and zero principal. And people who start ventures that operate or create jobs in "distressed communities" or "provide measurable social impact and benefit" can have up to $17,500 of their loans forgiven outright after five years.


All of which sounds great on paper, but startup culture is disproportionately white and male. If that's the path to loan forgiveness and expanded deferments, then who will really benefit?

"I think it's great to support entrepreneurship and innovation and to entice the millennial generation to support those things, especially in distressed communities," Michelle Asha Cooper, president of the Institute for Higher Education Policy told me over the phone when I asked for her initial impression of the proposal. "But, as with all political plans, the devil is really in the details."

Like how do you determine which companies would qualify for loan forgiveness? "What's the assessment of a good venture?" Cooper asked. "How do you determine when a company is worth making that investment in?"

And for new businesses that set up or create jobs in "distressed communities"—often communities of color with high concentrations of poverty and little sustainable neighborhood development—how do you make it as likely as possible that the people creating and participating in those ventures will be members of the community?


Because, again, startup culture is overwhelmingly white and overwhelmingly male. So how would this plan ensure that access to debt forgiveness and structural supports for independent businesses help the people who are already marginalized in those spaces—people of color, queer people, and women? (Another of Clinton's proposals to build out and diversify STEM pipelines, also announced today, may be part of answering that question, but that's a longterm approach to a problem that exists right now.)

"That is an unfortunate reality of how many of these things work," Cooper said. "I was encouraged to see that the policy is invested in distressed communities, which by and large is going to lead you to lower income communities of color, but to the point of getting those low-income communities of color involved in the innovations that actually impact their lives—this is a really important question that this proposal does not directly address."

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