Student debt relief, as a part of the broader issues relating to the economy, was one of the most important issues in the last election.
These extraordinary numbers are now leading some to call for a total forgiveness of all student loan debt held by Americans.
While once a position held only by radicals, like Bernie Sanders and Elizabeth Warren, student loan forgiveness has grown in popularity among the Democratic Party as a whole, especially because they can use it as an incentive to get out younger voters.
Even so called moderates, like Senate Majority Leader Chuck Schumer, have advocated for forgiving up to $50,000.
President Joe Biden recently used his executive powers to forgive $10,000 of student debt for Americans making less than $125,000 per year and forgive $20,000 for those same people who were eligible for Pell grants at the time they were attending university.
Whether those cases will be successful is still to be seen. What is likely is that the Democratic Party will continue to push for total student loan forgiveness. This would be a disastrous move for the U.S. economy and another blow to the nation’s identity, which is constantly under attack by the Democratic Party and their allies.
Student loan forgiveness will only help the rich get richer. 60% of all student debt is held by families classified as upper middle class or richer, according to researchers from EducationData.org.
Additionally, the vast majority of student debt holders are white. Student debt forgiveness would simply increase the disparity between the classes and the races, which is something Democrats allegedly claim to care about.
Student debt forgiveness is also anti-American.
The American Dream is still one of the things making America great. Anyone here can become what they want to be if they work hard enough and never give up. The other side of that coin means that nothing will be handed to you.
In the US, you have to work for what you earn, and if you take a risk and fail, that is your responsibility.
As early Americans put it referring to the American way of life, “there is no such thing as a free lunch.” Forgiving student debt would be a slap in the face to the American Dream and everything that America stands for.
Student loan forgiveness would also be a slap in the face to the financially responsible Americans who did not need to be bailed out by the government.
For those who worked hard and paid off their student debt, which is approximately 25% of those who take out student loans, they will receive no benefit from any student loan forgiveness. They will actually be victims to the effects on the economy student debt forgiveness would have.
Another group of those who will not benefit from student debt relief are people who made the smart choice and decided to go to trade school or similar apprenticeship programs.
There are millions of Americans working in trades in the U.S.. These people are the backbone of the U.S..
If anyone were to be rewarded for their efforts, it should be them. Instead, student loan forgiveness would benefit people who arguably were reckless with their money majoring in things like gender studies, which cost on average $30,000 per year.
Graduate students in high paying jobs are another group who would receive this unnecessary government subsidy.
Many advocates for student debt relief are aware of these facts, but simply argue that their loans should be forgiven in the name of fairness.
Lastly, forgiving $1.75 trillion of student loans would be disastrous for the economy.
Inflation is one of the biggest issues hitting the U.S. right now. Largely it is caused by the Russian invasion of Ukraine and high oil prices, which have been exacerbated by President Biden’s reckless policies.
This act was praised by both sides of the aisle and lauded for including provisions to combat inflation. Student debt forgiveness would do the opposite.
It is a hyperpolarized issue with little Republican support and would destroy any positive gains made towards fighting inflation.
A study done by the Committee for a Responsible Federal Budget (CRFB) found that Biden’s relatively small policy of forgiving just $10,000 of student debt for some student debt holders would “wipe out the disinflationary benefits of the IRA.”
Biden’s plan will also add over $600 billion to the federal budget. If forgiving just this small amount will have this large of an effect, the impacts of forgiving all $1.75 trillion of federal debt would be catastrophic.
Experts also predict that forgiving student debt would simply be like putting a bandaid on a bullet hole.
Many believe the inflationary effects of forgiving student debt would spiral to even higher numbers because universities would be incentivized to raise their tuition following debt forgiveness, since they know that that government is willing to bail them out.
Many groups have called for fundamental changes to the education system throughout the U.S., which simply means more big government and should be avoided because that is how this crisis started in the first place.