Should most student debt be forgiven?
- There are 43 million Americans who owe a total of $1.6 trillion in student loan debt as of February 2023. Younger borrowers between the ages of 25 and 34 hold the majority of debt, which is about $500 billion in federal student loans.
- The Education Data Initiative 2023 report found that the average federal student loan debt balance is $37,574 while the total average balance is about $2,000 more.
- President Biden has prolonged the student loan payment grace period several times, the latest extension moving the deadline from December 31, 2022, to June 30, 2023. His administration announced his initial “campaign promise” to cancel $10,000 of student debt for low to middle-income borrowers in August 2022, but the action is tied up in court lawsuits.
- Former President Trump first granted student loan relief in March 2020 during the first spikes of the pandemic before extending it to October and again in December. Prior to leaving office, he extended deferment until January 31, 2021.
- A June 2022 NPR/Ipsos poll found that 55% of the general public supported forgiving $10,000 of an individual’s federal student debt, while 47% supported canceling $50,000 in debt.
America is unique among developed nations in its high cost of education. Tuition expenses deter people from getting a higher education and leave those with degrees in massive debt with predatory lenders. This debt can cause difficulty and stress, reducing people's ability to contribute effectively to society with their degrees.
Student debt hurts our entire economy by putting pressure on people who should be starting families and businesses instead. But there are other larger effects as well—we cannot compete in the world market if we don't have the best and brightest workforce. However, as much as 83% of Ph.D. students here are foreign. Today, the US is not even in the top ten of the list of most educated countries.
Education is a fundamental right and one of any country's biggest strengths. Yet for us, it's falling away rapidly, with fewer people attending college every year since 2010. Innovation, expertise, and skills will follow in that decline. To combat this issue, we should forgive all education debt for those working in the field of their degree, especially those who work in the service of others (doctors, nurses, teachers, etc.)
Disingenuous politicians say this will hurt our economy, but this would only take money away from the lenders and put it back into the real economy. Borrowers could then afford more spending to boost the overall economy and reduce dependency on other government assistance programs. After forgiving previous debt, we need a new system that makes college free to those who graduate and utilize their degree effectively, like most of the world already does.
“Forgiveness” of student debt is a misleading concept used to mask extremely unjust policy. 'Loan forgiveness' means the taxpayer will have to shoulder the burden of people's inability—or unwillingness—to pay back their student debt. If the government 'forgives' student loans, the taxpayer—including poor, working-class families—will be the ones paying it.
Many people have not unwisely taken massive loans at such an early age to attend university. Some families have diligently saved to send their children to school without incurring debt. Other post-grad adults have either paid their way through college without loans or have finally finished paying off the last of their debt. Asking these people to be accountable for debt they did not initiate is unfair and wrong. Will these families and individuals be paid back? It is not the government's place to use taxpayer funds to pay off some people's debt but not others.
Tuition rates are so high because of the US government’s involvement in backing student loans. Universities have learned they can raise tuition as high as possible because of federally-issued student loans. These government-backed student loans are the real problem. But if government involvement disappears, universities would have to lower prices. Otherwise, hardly anyone could attend university anymore because it would be largely unaffordable. The age-old law of supply and demand would incentivize lower prices and options for interested students.
However, if the US forgives student loans wholesale, Universities will raise tuition even higher. Even the wealthiest families in America will take out student loans to send their kids to school if it's 'free money.” The blue-collar working class will end up paying for these children to go to Harvard or to earn their next PhD—either by inflation caused by printed money or tax hikes. Enacting student loan 'forgiveness' only exacerbates the situation.