The proposal details that as part of her initiative, "Participants can have up to $20,000 of debt forgiven and can defer all of their student loans, interest-free, during a business-formation period that can last for as many as three years. "
Harris' proposal led to immediate confusion, as it would mean students would face an additional burden beyond their student loans: starting a successful business. As Reason's Billy Binion says of the plan:
The provision is so ridiculously specific that it's hard to tell who exactly would benefit from it at all. Students who qualify for Pell grants hail from low-income households: They likely have little capital to begin with, which would certainly impede a successful small business.
Binion provides important perspective on the reality of Harris' proposal:
About 80 percent of small businesses fail within the first year and a half, and even fewer make it to Harris' three-year minimum. And her plan is supposed to be for businesses operating in disadvantaged communities. They face a much tougher entrepreneurial landscape and a subsequent decreased chance of success.
Harris' proposal to relieve student debt is just one part of a multi-pronged approach to reach equality in America. Harris writes:
Pipelines of opportunity should be available to all Americans. But for Black Americans, discrimination and historical injustice have created significant barriers to critical opportunity on-ramps like capital to start a business or access to the training and education needed to enter a lucrative field.
Her plan includes investing "$60 billion in STEM education at HBCUs and other MSIs," working with Congress to create a "$12 billion capital grant and technical support program, and ensuring that "Black entrepreneurs have a real shot at getting a federal contract awarded to their business."
Eliminating the opportunity gap and solving the debt crisis will each require a coordinated effort across the country; Harris' plan is the first step in uniting everyone on a list of strategies to work from.
Some say Harris' realism makes her plan easier to support.
But critics say Harris is starting out on the wrong track. Student loan debt is a crushing burden for much of the country, and people need relief, not more mountains to climb. Critics say the plan is far too limited in scope to offer any help. As one person on Twitter writes:
Just trying to understand who these people are who were granted pell grants but also have the capital to start a business in a disadvantaged area and can ensure it is successful for at least three years