By Blake Neff, DCNF
Democratic presidential candidate Hillary Clinton unveiled a new plan Tuesday that would provide student loan assistance, and potentially full forgiveness, to college graduates who try to start their own business. But almost immediately after being announced, critics on the left decried Clinton’s plan, arguing that it will be too beneficial to white male graduates.
Under a plan Clinton laid out Tuesday during a campaign stop in Denver, student borrowers who provide proof they’ve started a new business can have the interest on their student loans deferred for up to three years while they work to build their business. If borrowers start up their business in an economically distressed area, they’ll also be eligible to have up to $17,500 in loans forgiven after five years. Clinton’s plan says her administration would consider expanding this loan forgiveness to early employees of new businesses as well.
Clinton said her plan was intended to encourage innovation in the U.S. economy.
“It can be a lot harder [for entrepreneurs] if you’re juggling student loan payments, and that can cut into … what kind of risk you think you can take,” she said.
Some tech figures have already praised Clinton’s plan, with millionaire tech investor Brad Feld calling it “excellent and substantive.”
But not everybody is so happy. Bruce Wright, a reporter for the International Business Times, warned Tuesday afternoon that Clinton’s plan has a big flaw: It would help too many white people.
“[Clinton’s] plan to single out budding innovators for a break does little to address the needs of many black and Latino college students who are struggling to deal with what has become a crisis of paying off funds borrowed for college education,” Wright says in his piece. “The makeup of America’s entrepreneurs … lopsidedly skews white and male, two demographics that historically haven’t exactly been hurting for money when it comes to college.”
Ben Norton at Salon harped on a similar theme, blasting Clinton’s plan because “entrepreneurs are overwhelmingly from rich families, and are heavily white and male.” He also bashed the plan on the unusual grounds that people who start companies tend to employ people.
“Entrepreneurs employ people; business owners have people who work under them,” Norton says. “Clinton’s policy will help ease the student loans of these workers’ bosses, while employees are crushed under the enormous weight of their student debt.”
Wright and Norton weren’t the only people to criticize Clinton’s plan for being too generous to rich white people. Several people on Twitter slammed Clinton for the same reason.
HRC's dumb plan to forgive student loans for entrepreneurs would disproportionately benefit white men who already have access to capital.
— Julien Devereux (@jndevereux) June 28, 2016
— melissa “cancel student debt” byrne (@mcbyrne) June 28, 2016
US: We need tuition free education
HILLARY: hm, what if we deferred loans to rich people so they can innovate poor neighborhoods with apps?
— Chris Person (@Papapishu) June 28, 2016
Notably, despite all the criticism brought against Clinton, entrepreneurs are actually not exceptionally white. According to data from the Kauffman Foundation, only 59 percent of entrepreneurs are white, less than their overall population percentage of about 62 percent. Some 22 percent are Hispanic (substantially above their population share of about 17 percent), 9 percent are black, and 7 percent are Asian.
Men are more common among entrepreneurs, but are not utterly dominant, representing about 63 percent of entrepreneurs. More than a quarter of new businesses are founded by immigrants.
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