The debate on student loan debt has been circulating for years now. Should students be drowning in debt the minute they leave school, or should post-secondary education be more accessible with lesser financial restrictions? Let’s delve into the details of this ever discussed debate, and ponder whether student loans should be forgiven.
Over the past decade, the cost of college has increased by more than 16%, with 70% of students taking loans to fund their college education today. With automation rapidly erasing jobs for those without a college, or university degree, more individuals seek post-secondary education, despite its financial toll. Currently, in the United States, outstanding student debt is racked up to approximately $1.76 trillion, a total that is now more than tripled since the Great Recession. An overwhelming majority of that is owed to the federal government, which was temporarily refrained during the beginning of the COVID-19 pandemic.
A forgiveness program, implemented by the government, would help lower and middle-income individuals, allowing them to gain a college degree without enormous piles of debt. A significant amount of borrowers have less than $40,000 in loans outstanding, and forgiving $10,000 per borrower would clear loans for 15 million. Many believe that such a heavy financial burden should not be placed on many who are just receiving their first full-time job. According to an analysis of 2019 income data, the bulk of all student debt is owed by those aged 35-49. However, the student debt crisis affects those in all age groups, with about 2.5 million people above the age of 62, owing to an average of $40,000 per borrower.
While many are affected by the never-ending student debt, the forgiveness of it offers both pros and cons. Firstly, the solution would be one of empathy. This crisis was decades in the making, and it would benefit millions that suffer from student debt, and may even encourage more to pursue secondary school education, with fewer financial pressures. Additionally, from a more political perspective, loan forgiveness could help current President Biden gain more young voters for his party, a demographic that is crucial for the Democrats.
While there are definite positives in implementing a form of loan forgiveness, there are also some disadvantages. Inflation, an already pressing matter, may only worsen with student loan forgiveness. Due to the various sanctions imposed as a result of the Russia-Ukraine conflict, the US economy needs to restrain demand and no longer needs stimulus, which is not the effect the loan forgiveness will provide. Furthermore, many who have student loan debt, do not need help paying it off. While student loan forgiveness will relieve the financial burden on lower-income students, the average student generally does not need aid in paying off their debts.
While the topic of student loans and student loan forgiveness has circulated in the media for years now, no real action has been taken towards it. It would definitely be beneficial for a form of forgiveness to be implemented, especially for those with lower incomes, and in hopes of encouraging more to pursue post-secondary education without a massive financial burden.
Sources:
Dottle, Rachael, et al. “Why Forgiving Student Loan Debt Is so Complicated.” Bloomberg.com, 20 May 2022, www.bloomberg.com/graphics/2022-biden-student-loan-debt-forgiveness-explainer/.
Hess, Abigail. “What’s Still up for Debate When It Comes to Student Debt Forgiveness.” CNBC, 6 Apr. 2021, www.cnbc.com/2021/04/06/what-the-student-debt-forgiveness-debate-is-about.html.
Lange, Jeva. “The Pros and Cons of Student Loan Forgiveness.” The Week, 28 Apr. 2022, www.theweek.com/education/1013024/the-pros-and-cons-of-student-loan-forgiveness.
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