The US government needs to start investing in the American people, not in bailing out banks.

Zellie Imani is a writer, educator and organiser. He is also a co-founder of the Black Liberation Collectiveز

The COVID-19 outbreak is poised to devastate the United States’s economy. It has already led to unprecedented levels of poverty and unemployment. At this rate, the economic fallout from the pandemic is likely to be the worst recession since the Great Depression of the 1930s. To truly deal with the looming economic crisis, the US government will need to provide considerable relief that prioritises people, not profit.

One major step in this direction could be cancelling the $1.56 trillion in student loans, which would help millions of people recover after the pandemic subsides. Making public colleges, universities, and trade schools free would also help those hit hard by the crisis rebuild their futures and prevent another student debt crisis from emerging.

For marginalised communities of colour, who will bear the brunt of the social and economic devastation the pandemic will leave behind, and those who were already financially insecure before the outbreak, the need for such measures is more urgent than ever.

Crushing debt and inequality

Over the past 15 years, student debt has more than quadrupled, going up from $345bn in 2004 to nearly $1.56 trillion in 2020. It is half a trillion more than credit card debt which now stands at $1 trillion.

Across the country 69 percent of students take out loans to pay for tuition and other school expenses, and by the time they graduate they owe on average nearly $30,000.

Today, even though women make up 56 percent of college graduates, they hold almost two-thirds of all student loan debt amounting to $929bn.

Student debt also disproportionately burdens students of colour, whose communities have historically experienced many barriers to pursuing higher education. Some 85 percent of black bachelor’s degree recipients have loans to pay after graduation, compared to 69 percent of their white counterparts. Black students on average carry $34,000 in student debt – $4,000 more than white students.

On average, white and Asian students earn college degrees at a rate about 20 percentage points higher than Hispanic and Black students.

Black and other marginalised communities of colour, are disproportionately impacted by predatory lenders, too. Private loans for college tend to be the last resort when scholarships, grants and federal loans can no longer cover expenses. These particular loans often come with high interest rates and inflexible payment plans. Students then leave college crushed with debt and with no degree to provide them with a wage bump to help repay their loans.

According to the American Association of University Women (AAUW), 57 percent of Black women paying back student loans were not able to pay for essential expenses.

Thus, instead of being an equaliser that helps close the wealth gap between the rich and the poor, higher education in the US reproduces inequality. It increases the indebtedness of communities who already suffer from high levels of income insecurity and economic precarity.

It reinforces the cycle of poverty and the paycheck-to-paycheck life many marginalised families are forced to live, even if they are better educated. Parents with college degrees who have high levels of debt are unlikely to be able to afford higher education for their own children.

The economic fallout of the pandemic threatens to make this situation that much worse.

Free education

Some measures on student debt relief have already been taken.

On March 19, Senate Democrats proposed a plan to forgive $10,000 of federal student loan debt for all borrowers, which has been backed by presumptive Democratic presidential nominee Joe Biden.

On March 23, House Democrats, led by Congresswomen Ilhan Omar and Ayanna Pressley introduced The Student Debt Emergency Relief Act, which proposes cancelling $30,000 of student loans from all borrowers and requires the US Department of Education to pay all remaining federal loan payments for the rest of the outbreak.

In addition to the House and Senate bills, which are still to be voted on, Congress passed the CARES Act on March 27, which has effectively frozen student loan payments and interest rate accrual on federal loans.

But measures need to go further. Freezing payments and even cancelling $30,000 in loans per person would still leave millions of Americans steeped in debt, including many medical workers on the frontlines of the fight against COVID-19.

The CARES Act also does not apply to student who have taken out loans from private lenders (which in total stand at $124bn) and some companies are proceeding with debt-collection lawsuits amid the pandemic.

To truly address the current crisis of higher education, especially amid the COVID-19 pandemic, student debt needs to be wiped out completely. And to ensure that another student debt crisis does not emerge in the future, all public colleges and trade schools need to be made tuition and debt free.

It is not an outlandish idea and in fact, many colleges in the US were tuition-free in the past. In California, for example, in-state students did not have to pay tuition in public universities up until the 1970s.

Student loan debt cancellation and tuition-free education have already been gaining public support largely due to Senator Bernie Sanders’s 2020 presidential campaign.

Some states have piloted tuition-free programmes, but of these have eligibility requirements that leave out a great number of students. In 2017, New York state made SUNY and CUNY schools for families that make under $125,000 tuition free. In 2018, New Jersey also made community college free, but only 13,000 qualified under the programme’s eligibility requirements.

But the struggle to create a just system of higher education should not end with debt cancellation and free tuition. To ensure students are able to eat, pay rent, purchase books, and navigate life outside of the classroom, federal Pell Grants, which provide funds for students in financial need, have to be increased and eligibility for them expanded. Pell Grants, scholarships, and tuition-free education need to also be extended to those currently and formerly incarcerated as well.

Banks and private lenders have been allowed to benefit from this exploitative and unfair system of financing education for far too long. In 2008, when the Great Recession hit, President George W Bush signed into law the Troubled Asset Relief Program, allowing the US Treasury to spend taxpayer dollars to purchase failing bank assets to bailout the financial system, paving the way for a bailout worth between $16.8 and $29 trillion.

A complete student loan forgiveness would cost between 5 and 9 percent of that, and and can easily include the wiping of the $124bn owed to private lenders. Free tuition at public, post-secondary institutions would amount to approximately $79bn a year, which is affordable. Furthermore, increased access to higher education would lead to higher tax revenue generated by a larger population of higher-earning college graduates. With the advantages it generates, free-tuition education would eventually pay for itself.

As the US government is preparing to bail out big businesses once again, now is the time to demand a true reform of education – one which makes it free.

Cancelling all federal student loans will help ease already existing economic stressors. Free tuition will help society as a whole – and especially the most disadvantaged – recover from centuries of inequality that will only worsen as a result of the coronavirus outbreak.

Everyone deserves to live a life of dignity and the opportunity to reach their full potential. It is time the US government invest in the American people, not in financial institutions that concentrate wealth and contribute to national and global inequality.

The views expressed in this article are the authors’ own and do not necessarily reflect Al Jazeera’s editorial stance.