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Forgive Student Debt

Forgive Student Debt

Forgive Student Debt
The BriefGet Up To Speed

Americans owe an estimated $1.6 trillion – or nearly 8 percent of the nation’s GDP – in student debt.  Many young borrowers credit burdensome loans as the primary reason they haven’t purchased a home, started a family, or reached the economic milestones of past generations. Facing growing discontent over the rising cost of higher education, prominent Democrats – and some Republicans – are calling on Washington to act. They argue that forgiving federal student debt would save a generation from financial hardship, boost the economy, and help combat inequality. But their opponents argue that these proposals are simply too costly. In addition to ballooning the federal deficit, canceling student debt would reward irresponsible borrowers and waste taxpayer money on those who are not actually in need. Is it time for a student loan bailout? Or are federal dollars better spent elsewhere?   

For the Motion

"Student debt cancellation results in positive macroeconomic feedback effects as average households’ net worth and disposable income increase, driving new consumption and investment spending. In short, we find that debt cancellation lifts GDP, decreases the average unemployment rate, and results in little inflationary pressure (all over the 10-year horizon of our sim- ulations), while interest rates increase only modestly." 

Thursday, February 1, 2018
Scott Fullwiler, Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum
"Thus, if the government were to forgive all the student debt it owns (which makes up more than 90 percent of all outstanding student debt), and bought out all private holders of such debt, a surge in consumer demand — and thus, employment and economic growth — would ensue."
 
Friday, February 9, 2018
Eric Levitz

A senior student-loan official in the Trump administration said he would resign Thursday and endorse canceling most of the nation’s outstanding student debt, calling the student-loan system “fundamentally broken.”

Thursday, October 24, 2019
Josh Mitchell

"It is a time of big ideas and bold plans, but politicians are not the only ones with them. Higher education experts are sharing their own solutions to address the disproportionate impact student debt is having on the black community." 

Friday, September 20, 2019
Danielle Douglas-Gabriel

"The global financial crisis is fading into history. But the roots of the next one might already be taking hold."

Wednesday, September 12, 2018
Matt Phillips and Karl Russell
Against the Motion

"For all of his lofty altruistic talk, the democratic socialist’s student debt plan actually violates basic principles of social justice."

Monday, October 21, 2019
Charles Lane
"Loan forgiveness rewards fiscal irresponsibility. These limited programs are extremely problematic. While loan forgiveness sounds attractive, we should focus instead on how we got here."
 
Thursday, February 27, 2020
Mary Clare Amselem

"All this “free” education is funded by taxpayers, and not just the rich ones. In reality, Sanders’ tax on “Wall Street speculators,” meant to pay for his proposals, is a tax on all Americans."

Saturday, June 8, 2019
Russell Rhine
"As more Gen Zers come of age, they would be wise to learn from the mistakes of millennials and think twice before borrowing money to pay for school."
 
Tuesday, February 4, 2020
Brittany Hunter

"Conservatives tend to value equity, or proportionality, and they see unfairness when people are asked to contribute more than they should expect to receive in return, or when people receive more than they contribute."

Tuesday, April 30, 2019
Dan Meegan
"It would be a giant welfare program for the upper middle class."
 
Monday, November 18, 2019
David Leonhardt

"Alas, despite its progressive packaging, Mr. Sanders’s proposal is a formula for a massive upward redistribution of the nation’s limited resources."

Tuesday, June 25, 2019
Editorial Board
Student Debt By The Numbers

"The declines in the overall five-year repayment rates were largest in the public two-year (54% to 43%) and for-profit (43% to 34%) sectors—the sectors that already had the lowest repayment rates."

Tuesday, December 31, 2019
College Board
"Borrowing money for college is a common practice, but many people regret taking out student loans after the fact. U.S. student loan debt, spread out across 44.7 million borrowers, has reached the $1.59 trillion mark. That’s more than total U.S. auto loan debt (currently at $1.13 trillion) and credit card debt ($1.04 trillion)."
 
Wednesday, February 5, 2020
Maurie Backman

"We found that a $1,000 increase in student loan debt . . . causes a 1 to 2 percentage point drop in the homeownership rate for student loan borrowers during their late 20s and early 30s."

Tuesday, January 1, 2019
Federal Reserve

"About one-third of adults under age 30 have student loan debt. Among adults ages 18 to 29, 34% say they have outstanding student loans for their own education."

Tuesday, August 13, 2019
Anthony Cilluffo
"Despite her best intentions and her description of her plan as “progressive,” in fact, the bulk of the benefits from Sen. Warren’s proposal would go to the top 40% of households because they have the bulk of the loans. Borrowers with advanced degrees represent 27% of borrowers, and would get 37% of the benefit."
 
Tuesday, January 28, 2020
Adam Looney, David Wessel, and Kadija Yilla
"The official student loan default rate continues to fall, but don’t pop the champagne just yet."
 
Thursday, September 26, 2019
Preston Cooper
Economic and Social Implications of Higher Education
"More education has not led to higher earnings over time. Student debt is a burden for a growing share of young adults. Credentialization better explains these dynamics than the “skills gap.” These trends have had particularly negative impacts on Black and brown Americans."
Monday, October 1, 2018
Julie Margetta Morgan and Marshall Steinbaum
"We have copious evidence that this debt is dragging down the economy and that people are suffering," said Jiménez, who is co-leader of the university's Student Loan Law Initiative, which fosters research on student debt. "Studies link student debt to lower levels of home ownership and car purchases, higher household financial distress, delayed marriage and lower probability of going to graduate school."
 
Thursday, August 22, 2019
James Langford
"Students don't seem to be getting much out of higher education."
 
Wednesday, January 31, 2018
Bryan Caplan

"Simplify forms, clarify options, provide more information."

Wednesday, February 1, 2017
Rohit Chopra
Student Debt Relief Plans
"Today, we say to our young people that we want you to get the best education that you can, regardless of the income of your family. Good jobs require a good education. That is why we are going to make public colleges and universities tuition free, and cancel all student debt."
 
Friday, February 28, 2020
Bernie Sanders
"An economic analysis from leading experts on student loan debt finds that my plan would provide at least some debt cancellation for 95% of people with student loan debt (and complete and total student debt cancellation for more than 75%), provide targeted cancellation for the families that need it most, substantially increase Black and Latinx wealth, and help close the racial wealth gap."
 
Monday, April 22, 2019
Elizabeth Warren
"Rather than endorsing a specific approach here, our hope is that policymakers and the public can examine the trade-offs and merits of each proposal, especially by considering a range of policy goals, including equity, simplicity, extent of impact, and providing a meaningful level of relief."
 
Tuesday, October 1, 2019
Ben Miller, Colleen Campbell, Brent J. Cohen, and Charlotte Hancock
"The reason debt forgiveness could have a big impact on the overall economy is that a generation of Americans is making major life decisions differently because of student loans."
 
Wednesday, June 12, 2019
Chris Arnold
"The Education Department said Friday it will cancel federal loans provided last year to students at four Art Institutes locations after revelations that officials knew the for-profit colleges were not accredited and ineligible to receive such aid. The federal agency has been embroiled in controversy over its efforts to shield Dream Center Education Holdings, owner of the Art Institutes and Argosy University, from the consequences of lying to students about the accreditation of its since-closed schools." 
 
Friday, November 8, 2019
Danielle Douglas-Gabriel

"The Department of Education is more scared of giving loan discharges to the wrong people than it is of not giving them to the right people."

Wednesday, December 4, 2019
Claire Lombardo and Cory Turner

"Instead of taking out loans, students can agree to hand over part of their future earnings in return for investment."

Tuesday, April 9, 2019
Claire Boston
"An Education Department official acknowledged Thursday that a loan forgiveness program with a 99% rejection rate “presents numerous obstacles to borrowers.” Some critics contend that’s because the agency isn’t running the program correctly and is letting loans servicers give borrowers the runaround with bad information."

 

Sunday, September 22, 2019
Andrew Keshner
Polling & Public Opinion
"Asked if they support canceling student loan debt for all Americans, 54% of respondents answered in the affirmative and 39% in the negative. Among Millennials (those born between 1981 and 1996) and Generation Z (those born from 1997 onward) support for the idea jumps to 64% with 32% opposed. Generation X (those born between 1965 and 1980) respondents are similarly in support: 62%% to 30%. But Baby Boomers (those born between 1946 and 1964) do not favor the idea: 50% oppose erasing education debts while 40% support wiping the slate clean."
Saturday, October 5, 2019
Phillip Wegman
"Young men are taking longer to reach financial independence, as young women have gained ground"
 
Wednesday, October 23, 2019
Amanda Barroso, Kim Parker and Richard Fry
"Voters support 57 - 40 percent having the federal government forgive up to $50,000 in student loans for individuals in households making less than $250,000 a year; 52 percent of voters oppose this loan forgiveness plan if it were paid for by a new tax on the wealthy, with 44 percent in support"
Tuesday, April 30, 2019
Quinnipiac